HOA fees: what do you need to know?

1 min read by Unbiased team Last updated June 13, 2024

Discover everything you need to know about HOA fees, including what they encompass, budgeting for them, and the pros and cons of buying into a homeowners association.


  • A Homeowner’s Association (HOA) is a non-profit organization that helps manage, run, and maintain a neighborhood or community.   

  • Some residential property owners pay a monthly fee to homeowners associations in exchange for certain services. 

  • HOA fees can vary greatly but typically range between $200 - $300. 

  • Ask a qualified financial advisor for guidance regarding money management issues. 

What are HOA fees? 

HOA fees are monthly charges paid to the homeowners association of a specific community for the maintenance, repairs, and use of common areas and shared amenities.  

These fees may cover the maintenance costs of elevators, swimming pools, gyms, lobbies, landscaping, patios, and more. Utilities are also sometimes included in these charges. 

What do HOA fees cover? 

When buying a home in a community governed by a homeowners association, the HOA takes charge of the maintenance, repairs, and services that homeowners typically pay for.  

Let's explore what HOA fees cover generally. 

Maintenance and repairs 

Part of a homeowner’s HOA fees are set aside for the maintenance and repair of shared structures and common areas.  

These services could include: 

  • Lawn care and landscaping of the community’s grounds 

  • Removing snow from shared parking lots and roads 

  • Pest control 

  • Maintaining community roads and parking areas

Amenities and services 

Some HOA communities have shared amenities and services, which might include swimming pools, gyms, tennis courts, community entertainment areas, or added security measures, such as a gate, extra lighting, or a security guard.  

Municipal services and utilities 

Some HOAs include municipal costs or utilities in their fees, like trash removal, wastewater and water management, and cable.  

Other costs included in HOA fees 

A portion of the HAO fee goes towards insurance for damages or injuries occurring within the association's managed areas, such as sidewalks, common areas, or recreation areas.  

Additional expenses that may be included in these fees are reserve funds, which are money set aside for future financial obligations, like building repairs or roof replacements. 

How are HOA fees calculated? 

HOAs calculate fees due by members by assessing the annual cost of maintenance, repairs, insurance, utilities, and reserve funds. They divide the total budget by the number of homeowners, based on the proportionate share, often determined by the size or value of the property. 

The national average is $191 per month, but these charges can range anywhere between $50 and $1000+. 

The average HOA fees vary according to the amenities and services offered in the community and also depend on location.  

Different housing types will also incur varying fees.  

Single-family homes usually have cheaper HOA fees than condominiums. Communities in sought-after areas providing luxury amenities will charge much more than properties in less appealing areas.  

Property size can also affect HAO fees, with larger homes incurring higher charges than smaller properties.  

If the property is your primary residence, it is not tax-deductible, but if you have a tenant, the fees are considered a rental expense. 

Additional HOA assessments 

On occasion, HOAs levy special assessments to cover major or unexpected repairs, requiring additional capital besides that in the reserve fund.  

For example, natural disasters like a tornado may have caused severe damage, requiring more capital.  

Some cities, like New York, have regulations regarding refinishing building facades at specific intervals, which also increases the HOA costs. 

Can HOA fees increase? 

HOA fees can increase due to several factors: 

  • Inflation 

  • Higher costs of maintenance or unexpected repairs 

  • Upgrades and improvements of amenities 

  • Ensuring there are adequate reserves for future large expenses 

  • Additional services provided 

HOAs must usually give notice prior to increasing the fees, but state laws and CC&Rs typically dictate the procedure. These documents will state whether there is a minimum notice period, whether the issue requires a public vote, and the rules regarding a maximum increase amount. 

How do I manage my HOA fees? 

It’s essential to factor your HOA fees into your budget.  

The question of whether HOA fees are deductible from tax must also be answered, and this depends on whether you rent out your property, which state you live in, and other factors.  

You can write off homeowners association fees only if you meet specific criteria. 

Other management factors include: 

  • Knowing exactly what your HOA fees cover will help you determine additional expenses that must be included in your budget. 

  • Prioritizing your HOA dues, as non-payment can have serious consequences. 

  • Anticipating increases so you don’t get any nasty surprises. 

  • Staying up to date with your HOA’s financial health by reviewing its financial reports and upcoming maintenance costs. 

If homeowners don't pay their HOA fees, they could incur penalties such as late payment fees, limited or no access to amenities, a lien placed against the home, or even foreclosure. 

What questions should I ask before buying into an HOA? 

Before buying into an HOA, ask yourself the following questions: 

  1. How much are the fees, and what do they cover? 

  2. Will I use the amenities – is it worth it? 

  3. What are the HOA rules? 

  4. How often have fees increased over the years? 

  5. Does it include a reserve fund, and how much money is available in it? 

  6. Is there a history of special assessments, and if so, what purposes did they serve? 

  7. What type of reputation does the HOA have? 

What are the pros and cons of a HOA? 

Buying into an HOA can have pros and cons. 

Pros of a HOA 

  • A community may have more perks and amenities than individuals may afford on their own. 

  • Homeowners have minimal maintenance responsibilities. 

  • Properties in HOA-managed communities typically have higher values. 

  • Shared costs for services like security and trash removal can reduce individual expenses. 

  • The HOA deals with neighbor disputes. 

  • Homeowners live in well-maintained areas. 

Cons of a HOA 

  • The HOA can foreclose on your home if you don’t pay your dues. 

  • Homeowners must abide by the HOA’s rules and regulations. 

  • HOA fees can be expensive. 

  • The rules and regulations may be restrictive, potentially limiting your freedom to choose tenants, work from home, or renovate according to your taste. 

Get expert financial advice 

HOA fees cover repairs, maintenance, utilities, and insurance and provide for future costs. Prospective buyers should weigh the pros and cons to decide if living in an HOA-governed community suits them before buying into one.  

Find a qualified financial advisor via Unbiased to get expert advice when purchasing your home or making financial decisions about your future. 


Unbiased team

Our team of writers, who have decades of experience writing about personal finance, including investing and retirement, are here to help you find out what you must know about life’s biggest financial decisions.