According to HOA-USA, America has more than 370,000 HOAs. With each HOA comes the need for reliable property management, working to determine fee structures. This is especially important as HOA fees directly affect HOA home value.
When property managers determine an HOA's value, they consider items in the community that require repair, along with several other items. This helpful guide explains what affects an HOA's annual fees, and in turn, home value.
Understanding HOA Fees
When moving to an HOA, it's important to understand that annual fees are subject to change, considering the scope of work a community requires. When HOA fees are higher than market averages, it can prohibit value growth.
Here are some instances where HOA fees rise.
Assessment to Common Area Maintenance Fees (CAM)
When property management in Bedford, TX determines an HOA's home value, it takes into consideration Common Area Maintenance Fees (CAM) and what parts of the community are available to all residents. This includes (but isn't limited to) the following:
- Clubhouses
- Parks
- Playgrounds
CAM fees may also extend into snow removal or maintaining a boardwalk and beaches, should your HOA be near a lake or other body of water.
An HOA estimates the budget for the following year, based on these maintenance requests. The total budget is most likely divided among the number of homes in the HOA. It's common for HOAs to adjust their annual fees based on inflation.
Considering Capital Assessment in HOAs
Capital Assessment can also affect an HOA home value, which is why you need real estate management in Bedford to help navigate these expenses.
Anytime a community needs large-scale projects, they're considered capital improvements. This includes but isn't limited to:
- Roadwork
- Bridge repair
- Major repairs to the clubhouse, such as a new roof
Each HOA has different guidelines for what they consider to be a long-term project, which is what they consider capital investment. If an HOA determines the community needs a significant amount of work, capital assessment increases and residents pay more annually.
How These Fees Affect Home Values
HOA fees play a role in a home's value. If your HOA fees are exorbitant, it may affect who can afford to purchase your home. If a potential buyer's funds are already earmarked for paying their mortgage, they may be unable to pay higher-than-normal HOA fees.
Property managers consider other HOA fees in similar communities. Does the HOA in question offer the same services? If so, they can adjust their HOA fees accordingly, although they may not be required to.
For capital assessment and other long-term projects, property managers can spread HOA fees out over a number of years, working to keep fees lower, if possible.
When working with the right association management company in Bedford, TX they work to keep fees consistent with the local housing market.
HOA Home Value Explained
HOA home value is connected to an HOA's annual fees. Property managers carefully monitor local real estate trends, comparing current HOA fees to similar communities. They also consider community repairs and how these affect the capital reserve.
This is why you need trusted professionals overseeing your HOA. PMI Metroplex Properties can help. We offer a Free Rental Analysis along with board member and homeowner resources for HOAs. Contact us today to learn more.
