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Are Low HOA Fees Good or Bad for Your Community?
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Are Low HOA Fees Good or Bad for Your Community?

The monthly dues contribute to many different factors in the community. And while low fees can be an appealing option for the residents in the community, you need to question the benefits and how they will affect the overall quality of life for the entire association.

HOA Capital wants you to understand how low fees can affect the community, so let's look at some pros and cons of this scenario.

Are Lower Fees a Good Idea?

Some people would argue that a lower rate is beneficial, but, in most cases, less doesn't mean more. Low HOA fees can be an enticing selling point for homeowners, but the reality is that not having to pay higher dues while having community benefits is not going to be the situation.

This is because the fees are in place to provide ample services; they can make the association a more comfortable and appealing space to live in, making higher fees a better option.

What are the Drawbacks?

There are several drawbacks to having low fees, including:

Price Fluctuations

Inflation is a standard part of society, and as products and services rise in price, the HOA system will be unable to keep up if the monthly dues don't fluctuate. Even in the best-case scenario with the highest quality structures, overtime will cost more to maintain them as they age, and having low HOA dues can prevent essential upgrades.  

Property Value Decreases

The HOA exterior maintenance will affect the property's curb appeal, making it an essential part of the value of the association. When there are low fees in place, this means more out-of-pocket costs and fewer resources available, resulting in a community that looks dilapidated and a lower property value for everyone.

Maintenance Requirements

Basic maintenance is another concern if there are low monthly dues. Upkeep will need to happen eventually, and adding proactive maintenance can be seen as a benefit to enhancing the space and making it a more enjoyable living area. Low monthly fees can create a deficit affecting the overall infrastructure, meaning problems will not be addressed until the last minute.

What are the Benefits?

The main benefit to having lower HOA fees is that the homeowners will be temporarily happier. The individuals have typical living expenses such as utility bills or mortgages, and adding an HOA fee can create a feeling of an additional burden.

However, when repairs or capital improvements are needed, and the association doesn't have enough fees, the maintenance cannot be completed. This often leads to decreasing property values, resulting in neglect and unhappy homeowners.

HOA Capital Your Source for Trusted Loan Support

Not having funding in place for the essentials of your association is a frustrating experience. And regardless of how big or small your budget is, HOA Capital is a trusted lender to help you get the funding you need for your project in Minnesota. Whether you are looking to build an HOA clubhouse or need help finding the right loan, our team of experts is here to answer any questions you have.

Our goal is to help make your association a success, and we are here to help you from start to finish, so contact us online or call us at 952-836-9593 today to get started.

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