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What Are The Upsides and Downsides of Low HOA Fees?

Real Estate Agent with RE/MAX Executive Realty 91362

If you plan on buying where there is a homeowners association, there will likely be costs involved.

Homeowners' Association (HOA) fees are common in many residential communities, especially in planned developments and condominiums. The HOA collects these fees to cover the costs of managing and maintaining the shared amenities, common areas, and services within the community.

While HOA fees vary based on the specific community and its offerings, homeowners need to weigh the pros and cons of low HOA fees before making a decision.

We will delve into the advantages and disadvantages of reduced HOA fees, helping you make an informed choice about your homeownership experience.

What Are HOA Fees?

Are you interested in knowing what an HOA fee is? HOA fees, short for Homeowners' Association fees, are recurring payments made by homeowners to the HOA to support the maintenance, upkeep, and management of shared community resources.

These fees are typically assessed monthly or annually, depending on the community's guidelines. The funds collected from HOA fees cover various expenses such as landscaping, common area maintenance, building insurance, security, utilities, and reserves for future repairs or improvements.

HOA fees are standard in condo and townhouse communities.

Pros of Low HOA Fees

When evaluating the benefits of low HOA fees, homeowners can consider several key advantages. Lower fees can lead to significant cost savings, provide financial flexibility, increase affordability, and reduce overall financial burdens.

Let's explore these pros in more detail:

Cost Savings

The most apparent advantage of low HOA fees is the financial benefit. Lower fees mean reduced monthly or annual expenses, allowing homeowners to allocate their resources elsewhere, such as savings, investments, or discretionary spending.


Low HOA fees may provide homeowners with more financial flexibility, especially for those on a tight budget or looking to minimize their housing expenses. It allows individuals to have more control over their financial decisions and allocation of resources.


Lower HOA fees can make properties more affordable and accessible to a broader range of buyers. This can be particularly beneficial for first-time homebuyers or individuals seeking entry into a desired community with shared amenities and services.

Reduced Financial Burden

Lower fees may help homeowners reduce their financial burden, particularly if they face other significant expenses, such as mortgage payments or student loans. This can lead to improved financial stability and peace of mind.

Lower HOA fees may allow homeowners more flexibility in customizing their properties. With fewer restrictions and regulations, homeowners can make modifications and upgrades according to their preferences, enhancing the uniqueness of their homes.

Lower Entry Barrier For Investors

Low HOA fees can attract real estate investors looking to purchase properties for rental purposes. The reduced monthly expenses make investing in properties within the community more financially viable and potentially yield higher rental income.

Freedom From Overbearing Regulations

Sometimes, communities with lower HOA fees may have fewer homeowner activities rules and regulations. This freedom can provide a sense of independence and less interference in personal lifestyle choices.

Cons of Low HOA Fees

While low HOA fees may seem appealing, knowing the potential drawbacks is important. Lower fees often result in limited amenities and services, deferred maintenance, less property value appreciation, and inadequate reserves.

Understanding these cons will help homeowners decide about their HOA fee preferences.

Let's examine these drawbacks in more detail:

Limited Amenities and Services

Low HOA fees often result in limited community amenities and services. Shared facilities, such as pools, fitness centers, playgrounds, or clubhouse access, may need to be improved, affecting the overall quality of living within the community.

Deferred Maintenance

There needs to be more funds generated from low HOA fees to ensure the HOA's ability to perform necessary maintenance and repairs. This can result in the deterioration of community infrastructure, reduced property values, and potentially expensive assessments in the future.

Less Property Value Appreciation

Communities with higher HOA fees often have better-maintained amenities, aesthetics, and services, contributing to increased property values over time. Low HOA fees may limit the potential appreciation of property values within the community.

Inadequate Reserves

Low HOA fees can result in insufficient reserve funds and challenging addressing unexpected expenses or significant repairs. Without sufficient reserves, the HOA may need to impose special assessments on homeowners, leading to unexpected financial burdens.

Special assessments can be a significant amount causing financial distress among many owners.

Final Thoughts

Understanding the pros and cons of low HOA fees is crucial when considering homeownership in a community governed by an HOA. While low fees may provide short-term financial advantages and flexibility, they can also lead to limited amenities, deferred maintenance, and potential financial burdens down the line.

It is essential for homeowners to carefully evaluate their priorities, financial situation, and long-term goals when deciding whether low HOA fees align with their needs.

Consulting with a real estate professional or reviewing the HOA's financial statements can provide valuable insights to make an informed decision about your investment in a community with low HOA fees.

Posted by

With three decades of experience, Bill Gassett is an authority in the real estate sector. Bill writes informative articles for numerous prestigious real estate sites to help buyers, sellers, and fellow real estate agents. His work has been featured on RIS Media, the National Association of Realtors, Inman News, Placester, Realty Biz News, Credit Sesame, and his own authority resource, Maximum Real Estate Exposure. Reach out to Bill Gassett for his real estate, mortgage, and financial expertise.


Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Hello Bill - buying property is not easy.  A thorough understanding of a HOA may be too big of an undertaking for some to consider.  However, it's important to be well-acquainted with the documents as well as aspects of the community prior to completing a transaction.  It's a big deal.  To say the least.  

Jun 21, 2023 06:01 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Good morning, Bill... I've always lived in an HOA.. be it a coop in NY City or neighborhood here in Charlotte. I'm all about HOA's and believe that the benefits outweigh the negatives... and it's also often more a question of how reasonable the fees are for a specific neighborhood. That being said, you did a masterful job of laying out the pros and cons.

Jun 21, 2023 06:20 AM
Richard Weeks
Dallas, TX
REALTOR®, Broker
Great information, thanks for sharing.  I hope you have a great day.
Jun 21, 2023 06:40 AM
Joe Jackson
Keller Williams Capital Partners Realty - Columbus, OH
Clintonville and Central Ohio Real Estate Expert

Great information, thank you for sharing!

Have a super fantastic week!

Joe Jackson, Realtor-KWCP

Jun 21, 2023 08:52 AM