HOW TO INCREASE YOUR HOA VALUE
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THE PRIMARY PURPOSE OF A HOMEOWNER ASSOCIATION (HOA) The primary purpose of a Homeowner Association (HOA) is to preserve and enhance the property value of homes in their communities. A well-managed association is crucial for attracting potential buyers. However, the success of this objective depends on a series of practices, regulations, and processes that allow the proper maintenance of home exteriors, shared areas, amenities, and landscaping.
THE FIRST OWNER’S ASSOCIATIONS According to a document called The Impact of Community Associations on Residential Property Values, the first owner’s associations were created in 1850, and their purposes were the maintenance of common areas and the prohibition of some uses through a series of restrictions. In current days, the number of community associations in the U.S grew 30-fold from 1970 to 2013, and they are representing approximately 24 percent of the national housing stock ($4.65 trillion in real property value.
THE ROLE OF COMMUNITY ASSOCIATIONS
Likewise, according to the document mentioned above, community associations play a fundamental role when it comes to influencing the property value in residential communities. This role depends on the structure and organization of the HOA. In this sense, the organization can encompass several components such as the mitigation of negative externalities through constraints, the service provision and neighborhood preservation, and enhanced efficiency.
THE IMPORTANCE OF HOA MANAGEMENT When you buy a property, you are making a crucial decision. When you choose a residential community, it is vital to understand the existence of HOAs. Indeed, as mentioned above, an HOA takes care of all common areas, but this purpose is possible through the fees collected from residents to maintain and repair community amenities.
RESTRICTIVE COVENANTS
Proper enforcement of covenants is beneficial for housing value within the community. However, these restrictive covenants can also produce valuation detriments when they are unduly applied. Restrictive covenants can have price effects that fluctuate from 5.64% to 19%.
Another advantage of homeowner associations is that they are communities where you can enjoy amenities such as playgrounds, pools, clubhouses, or tennis courts. Hence, not only proper maintenance of common areas and landscaping improve the attractiveness of a community, but associations can turn any neighborhood into an extraordinary community by the sponsorship of activities and events. It encourages a familiar, safe, and fun lifestyle that can attract potential buyers and improve the property value of your home.
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