KNOW BEFORE YOU BUY
A home is best when it is in a thriving community.
Most properties I manage have a Homeowners Association or HOA.
And dealing with them on a daily basis is an ordeal in itself.
From condo units to multi-unit complexes that have shared common areas, the Homeowners Association has a vital role to play.
So let’s dig deeper about this crucial part of homeownership:
What is the HOA?
The HOA is an entity in a subdivision, planned community, or condominium building that makes regulations and enforces rules for properties and their residents.
In the state of Illinois, an HOA has elected board members of volunteers.
Some HOAs hire professional property managers for daily tasks such as maintenance, finances, and enforcing rules.
What You Should Know about HOAs
Here are the things you need to know about HOAs:
Remember these things because they are integral to your real estate investment, both as a resident and landlord.
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Get all HOA association documents done ASAP.
Complete and submit all their required documents as soon as you finish the sale of the property.
As soon as you have a property under contract and that property is part of an HOA, make sure you get yourself familiar with the bylaws, rules, and regulations.
This is especially crucial for investors who want to rent the property in Airbnb since there are tight restrictions on such short-term rentals.
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Research the HOA.
If the HOA is under the management of a private company, look up their ratings online.
Read reviews and personal feedback.
Make sure that they are reputable and accessible to you and your needs.
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Check the financial health of the HOA.
The financials are a very important aspect of a homeowner association.
You can see how healthy the HOA is by looking at its profit and loss statement.
Check for any discrepancies, inconsistencies, and delinquencies.
Know the association’s expenses.
How do they use the funds they get from their members?
4. Check the common areas in the HOA territory for any things that require repairs.
This is not just so you can assess whether you can enjoy these amenities.
Rather, you need to check if the association has enough money and resources to tackle any such repairs.
If not, most likely they will ask for a special assessment due for the repairs.
And that fee is an additional burden on top of the regular HOA fees.
5. Check if they have insurance.
Make sure that the association is properly insured and protected from lawsuits, malpractice and that it also protects all of its members.
6. Gauge the environment and dynamics of the HOA and the community.
Ask for the minutes from the last few board meetings.
Having these clear recordings of the discussions of the HOA members will help you see how they work and the environment they foster.
This will also show you the initiatives, goals, and values of the HOA.
Make sure that the association where you plan to invest is strong and healthy. by requesting
All these things are necessary so that when you buy a home, you will work well with the HOA that manages the community you will move into.
