Of all the people who invest in the real estate market today, about 25% of them buy homeowner’s association or HOA. Indeed, all real estate properties do have issues with them, but stats reveal that most of the problems are associated with HOA. So how do you avoid the most common of these?
A survey was conducted to save people like you from becoming a trap to HOA problems. The most common problems were determined and then solutions and preventive measures were recommended. Here are the highlights.
Preventing the problems from occurring altogether
HOA problems may be burdensome and frustrating, but did you know that they would never have occurred had you reviewed all paperwork properly? This includes all the property documents, reserve studies, financial statements and CC&R’s. Going through all these can provide you with an insight to expected issues. If these are too much to handle, you can just drop the decision to buy that particular HOA property.
Bearing special assessments
This is one of the most common HOA problems. People do not properly read the minutes of the board meeting or go through the notes, and so at times they might fail in spotting a construction issue. In many a cases, the costs of repairing gas have often gone over $7000, which is quite high. So until you properly go through the meeting minutes, you can never find out anything about these types of issues.
Purchasing a rental property that is not rentable
In many communities, there is a limit to the number of units that can be rented. If the value is crossed, the owner cannot rent out any more units until a few of the homes are converted into personal residences.
Just recently, a woman faced this very issue. She gave $20,000 for a condo, but did not read the CC&R’s. The escrow account was closed at $100,000 and the woman decided on a lease. The board prevented her because her intended action was against the enforced rules. If you do not want to end up like this woman, make sure you go through the CC&R’s carefully.
Paying greater fees than the mortgage payments
Mortgage payments can be affordable if the home you live in is a restricted income unit. However, if the repairs cost rise, the HOA fees can go significantly higher. This implies that you should read the Reserve Study so that you are aware of all upcoming repairs.
Courtland Building Company would love to help you plan your green home, call us today: (281) 932-4494