One of the most alluring reasons to live in an HOA community is the prospect of property appreciation. Generally, real estate assets gain value over time, but the rate of appreciation is dependent on several variables.
HOA properties have greater appreciation potential because of the nature of these communities. However, even within HOAs, some factors will impact property values. This means that homes in some HOAs can appreciate more than homes in other HOAs.
What brings about the difference in HOA home value? Let's investigate.
1. HOA Management
An HOA community is a controlled area with rules and regulations that all residents must follow. It's led by an HOA board, which is responsible for ensuring proper management of the community.
HOAs that have competent management are more likely to record good property appreciation rates. That's because the community will become a more attractive place, especially for new home buyers who are looking to snap up properties in HOAs.
This can lead to increased demand for homes in an HOA. Strong demand will increase property prices.
The opposite is true for HOAs that are mismanaged. If communal facilities are poorly maintained, for example, the community will lose its allure. Homeowners can even start moving out, putting their properties up for sale at throwaway prices.
2. HOA Rules
Certain HOA rules can have an impact on property values.
For example, rental restrictions, such as prohibiting homeowners from using their properties as short-term rentals, can help maintain the community's goal to provide a serene living environment for residents. Allowing rentals can lead to chaos since renters are more likely to disregard the HOA's rules on issues like partying and noise.
Most HOAs also prohibit property owners from making any structural changes or additions that can alter the architectural style of the homes. Maintaining architectural standards can have a positive influence on HOA home value. Many buyers are attracted to the style of architecture in HOA communities.
3. Location of the HOA
Location is the final boss when it comes to real estate property values.
It doesn't matter how competently an HOA is run or how amazing the environment is, if it's located in an area with high crime rates and aging infrastructure, don't expect to see any remarkable property association.
Of course, developers of HOA communities know the importance of location, so they scout around for the best locations. However, no one can foretell the future. An otherwise prime location can deteriorate within a decade, taking HOA property values down with it.
When you're shopping for an HOA, assess how the location is likely to change over time.
Preserve HOA Home Value With Professional Management
Whether you're an aspiring HOA homeowner or are already one, you're keen on making smart investment decisions. Learning what affects HOA home value is no doubt a good place to start.
HOA management is one of the biggest factors influencing home values, which is why smart communities turn to professional HOA management companies.
In Jessup, Maryland, PMI Village Alliance is the premier provider of association management services. Although we're part of a franchise network that's been in the game for over 20 years, our company is locally owned and independently operated.
Get in touch to learn more about our services.
