Homeowners association fees, usually referred to as HOA fees, are a fee paid by homeowners to the neighborhood’s homeowners association, if they have one. But what are homeowners actually paying for with their fees? How much are typical HOA fees? And how often do homeowners have to pay? If you manage a rental property with these fees, how does that impact you?
In this TenantCloud guide, we’ll take a closer look at HOA fees. You’ll find out how much homeowners pay on average, and what services typical homeowners’ association fees cover. We’ll also examine the pros and cons of paying HOA fees.
What Are HOA Fees? (Meaning, Definition, and Why They Exist)
HOA fees are mandatory payments made by homeowners in managed communities like subdivisions, HOAs, and condominiums.
In simple terms, the fee is a homeowner’s monthly or annual dues to the HOA. The fee pays for shared community maintenance and services, like landscaping, trash removal, and insurance. It also covers amenities like gate security, swimming pools, and clubhouses.
Another term you might hear for this payment is “home association fee.” While it sounds like it could describe something else, it’s actually interchangeable with “homeowners association fee.”
The organization that collects the fee might be an HOA board or a property management company. The board or company then allocates funds to community services and reserves funds for larger repairs.
A common objection to HOA fees is that the person paying already owns the home in many cases. However, there are benefits to paying HOA dues, and they are essential for maintaining common areas, enforcing community rules, and paying for shared amenities.
In fact, HOA fees are usually required by CC&R (covenants, conditions, and restrictions) agreements. As such, this is a legally enforceable fee for most HOA homes.
For many buyers and landlords, it’s common to encounter typical homeowners’ association fees when purchasing in planned communities.
Typical Homeowners Association Fees: National Averages
When we talk about “typical homeowners association fees,” we’re referring to the most common monthly cost range across US communities. Average monthly fees may be higher or lower in your area.
The national average range for HOA fees is $200-$400 per month. The exact amount depends on the type of property and the amenities provided by the community. For example, typical homeowners’ association fees can vary between condos, townhomes, and single-family homes.
Different communities also offer different services for residents, which impacts the monthly HOA fees, meaning they can vary widely. Baseline fees might cover basics like landscaping, while premium communities may have higher fees for luxury amenities like pools, gyms, and security.
Keep in mind that average HOA fees are not fixed, and they can vary widely by region and the age of the property. Moreover, factors like inflation and maintenance costs often cause HOA fees to gradually increase over time.
Typical homeowners’ association fees are also usually higher in areas with a higher cost of living, such as urban areas and housing markets in desirable areas.
How Much Are HOA Fees? (Real-World Ranges and Examples)
Average association fees can run anywhere from the lower end of $50-$100 per month up to $1000 or more in the most exclusive communities.
Here’s a breakdown of the types of services and amenities usually covered by different HOA pricing tiers:
- Low-end communities: Communities with lower fees usually offer minimal amenities and have self-managed HOAs to keep costs low.
- Mid-range: Communities with middling HOA fees typically offer services like landscaping and trash, as well as basic amenities.
- High-end: The areas with the highest HOA fees are usually gated and staffed, and offer full-service amenities.
Typical homeowners’ association fees can also shift based on the types of amenities offered, like pools, gyms, elevators, and security. Each of these amenities isn’t a one-time investment, but instead requires regular maintenance costs.
For communities in metro areas, the amenities and corresponding fees might look different. Fees are usually higher in cities than in rural and suburban areas. Condo communities tend to have higher HOA fees than single-family homes since they require building maintenance.
HOA fees may include some “hidden” costs for services that aren’t as visible as trash removal and landscaping. HOA boards usually keep some of the revenue from fees reserved for large-scale renovations. Fees also cover repairs and non-tangible costs, like insurance.
Homebuyers considering a property in an HOA community need to account for it in their budget. Couch HOA fees into your monthly cost of home ownership, along with mortgage payments, utilities, and repair costs.
What Do HOA Fees Cover?
Here are some of the most common services funded by HOA fees:
- Landscaping and lawn care for shared spaces
- Trash collection and snow removal
- Pool, clubhouse, and fitness center maintenance
- Security gates or patrol services
We’ve mentioned reserve funds, but what do HOA boards use these reserves for? This long-term savings account helps communities prepare for long-term repair planning projects like roofing, paving, and structural maintenance.
HOA fees also cover administrative costs that come with operating a housing community. These costs include hiring management companies, maintaining legal compliance, and the cost of accounting.
Typical homeowners’ association fees are tied directly to community upkeep. The more in-depth services the HOA offers, the higher the fee usually is.
Basic HOA coverage might include routine services like:
- Trash collection
- Snow removal
- Street lighting and maintenance
- Landscaping of common areas
- Basic amenities like a community pool
Luxury HOA communities often provide premium services and amenities, such as:
- Home exterior maintenance
- Individual home lawn care
- Premium amenities like a private golf course and resort-style clubhouse
Better-funded HOAs tend to have higher fees since they operate in a more involved capacity. Like a business, as an HOA grows, so do its administrative and operating costs, and thus its fees.
However, transparency is also a key part of any HOA’s funding. An HOA budget determines how the board invests funds annually and is typically voted on and approved by the board.
Factors That Affect Typical Homeowners Association Fees
These are the factors that can impact typical homeowners’ association fees:
- Location: Urban areas typically demand higher HOA fees than suburban and rural communities.
- Property type: Condo associations usually charge higher fees than single-family homes to cover building maintenance costs
- Amenities offered: Amenities like pools, gyms, security, elevators, and concierge services contribute to the HOA fee.
- Age of community: Older properties may require higher maintenance contributions to keep them in good condition.
- Size of HOA: Smaller HOAs often have higher per-home costs since there are fewer homeowners contributing to the fund.
- Reserve fund health: Underfunded reserves can increase HOA fees unexpectedly if a sudden large-scale project comes up.
- Management structure: Professionally managed HOAs usually have higher fees than self-managed associations, but also offer more comprehensive services.
- Local cost of living: Property prices and insurance rates in the area usually impact typical homeowners’ association fees.
Average Association Fees by Property Type and Location
Here’s a breakdown of average association fees across property types:
- Single-family homes: Typically lower monthly dues than other property types
- Condos: Higher HOA fees due to shared building systems, repairs, and maintenance
- Townhomes: Typically mid-range, depending on coverage
Homeowner association fees also vary by region. Communities in West Coast states like California and Oregon usually have the highest HOA fees, while the less densely populated Midwest usually has the lowest HOA fees on average.
HOA fees in the South vary. Rural areas are usually more affordable, while beachfront and lakeside homes command premium HOA fees. The Northeast also has some variance between metro areas like New York City and Boston, as opposed to less populous New England states like Delaware and New Hampshire.
The biggest source of HOA fee variance is metro areas and major cities, where the cost of living is higher. This is especially true of coastal markets with even higher real estate prices.
Luxury developments tend to inflate HOA fees significantly, since they usually have enough demand that they can afford to charge more. Master-planned communities, for example, offer a more resort-like experience with community events and premium facilities. HOA fees in these developments can often be in addition to a separate master association.
Budget communities with smaller fees typically limit their services to basics like street-level maintenance. Keep in mind that average association fees reflect the intensity of services rather than just home size and location.
Pros and Cons of Paying HOA Fees
These are the biggest upsides and disadvantages of HOA fees:
Benefits of HOA Fees
- Maintained curb appeal and shared community upkeep
- Access to amenities (pools, parks, gyms, security services)
- Property value stabilization in well-managed HOAs
- Reduced homeowner maintenance burden
- Community rules that prevent property neglect
Drawbacks of HOA Fees
- Monthly cost increases overall housing expense
- Restrictions on property modifications or lifestyle choices
- Risk of poorly managed HOA budgets increasing hoa fees
- Special assessments for unexpected repairs
- Frustration with rule enforcement or penalties
Typical Homeowners Association Fees vs. Overall Housing Budget
Typical homeowners’ association fees can have a significant impact on total monthly housing costs, alongside mortgage payments, property taxes, and insurance premiums.
As a rule of thumb, it’s usually a good idea to factor HOA fees into your budget as you would a fixed utility cost.
No two HOA communities are exactly the same, and HOA fees might not be exactly relative to the value of the property. In some cases, homeowners may have a high mortgage payment with a low HOA fee, while others may pay more for the HOA but have a smaller mortgage.
A common mistake homebuyers can run into is focusing only on the price of the home itself while ignoring HOA fees. In many cases, lenders factor HOA dues into debt-to-income calculations.
However, high HOA fees may be worth the cost depending on how much you plan to use the amenities. If the services cover maintenance you might otherwise pay for, like landscaping and home repairs, it could offset the cost.
When HOA Fees May Be Too High (Red Flags to Watch)
There are some scenarios where it might not make sense to pay a high HOA fee. Watch out for red flags like:
- Fees increasing rapidly year over year without clear explanation
- Underfunded reserves leading to frequent special assessments
- Lack of transparency in HOA financial reports
- High hoa fees without matching amenities or services
- Poor maintenance despite rising dues
- Disproportionate fees compared to nearby communities
- Signs of mismanagement or board instability
How to Evaluate Whether HOA Fees Are Worth It
To assess whether your HOA fees are worth the cost, consider how they compare with the value of the services and amenities provided. It’s also a good idea to review the HOA budget and assess the health of the reserve fund before closing on a house.
You might also ask how often the fee has increased in the last few years, and by how much. If there are other HOA communities in the area, find out what they charge homeowners for comparison.
For some homeowners, the restrictions that come with HOA regulations aren’t worth the amenities provided. Determine for yourself if the community rules are compatible with your desired lifestyle and financial comfort level.
Finally, consider how a well-managed HOA might impact the long-term resale value of a home if you decide to sell in the future.
FAQs About HOA Fees
What is included in typical homeowners' association fees?
Typical homeowners’ association fees usually include services like common area landscaping, shared amenities, and services like trash removal and snow plowing.
Developments with higher fees may also offer premium services like gated security, a resort-style clubhouse, and private recreational facilities.
Why do HOA fees increase every year?
HOA fees increase each year due to rising costs such as inflation, property taxes, and insurance rates. HOA boards may also raise fees to contribute to a reserve fund for large-scale renovations.
Are HOA fees tax-deductible?
HOA fees are usually not tax-deductible if you live in the property as your primary residence. However, you can deduct the fee as a tax expense if you rent the home to a tenant. If you have a home office, you may be able to deduct some of the HOA fees on your taxes.
What happens if you don’t pay HOA fees?
Non-payment of HOA fees can lead to late fees, loss of access to shared amenities, and legal action. Prolonged non-payment can lead to the HOA foreclosing on your property.
Can HOA fees change after you buy a home?
Yes, HOA boards can raise HOA fees to cover rising costs. Fee increases are usually no more than once per year and require written notice.
Are higher HOA fees always better?
Higher HOA fees usually come with more comprehensive services and amenities, but not always. Be wary of an exorbitant HOA fee if the board’s reserve fund isn’t in good health or if they don’t provide services commensurate with the cost.
