Real EstateChoosing Between A Condo Or Townhome? An HOA Might Make The Difference

By Hogan Willis, Real Estate Sales Team Lead, Digital Marketing Specialist, Luxury Simplified Real Estate

If you’ve opened up your home search in Charleston SC to include purchasing a condo or townhome, it’s important to keep in mind that monthly costs go beyond the listing price and can vary greatly. Part of a larger multi-unit structure or community, most of these types of homes have an organized Homeowners’ Association (HOA) which residents are required to join. An HOA, or “regime fee ” can be the differentiator in choosing which one might be the most affordable option for you. Before deciding “yes ” on your dream home in Charleston, follow these 7 steps to determine if this is truly the right home and community for you and your family.

HOA fees mean paying dues or regime fees that are used to maintain common areas and community amenities. Before committing to the community and the HOA, it’s a good idea to take a closer look at how the organization is run and how the facilities are maintained. You want to ensure that they will use your money to invest in the property, which will ultimately impact not only your quality of life but the resale value of your home as well.

Step 1: Look Around

Are the common areas well maintained? Is the exterior well manicured? If the common areas are dirty, outdated or dilapidated these can all be signs that the HOA is neglecting to maintain the facilities. 

Step 2: Read Meeting Minutes

HOA board members and residents will typically hold monthly, quarterly, or annual meetings where members discuss the community and property needs, address maintenance updates, plan for repairs, and make decisions regarding funds allocations for short and long term projects. An unproductive board may discuss issues but fail to address them, differ needed maintenance, and are unable to make decisions. By reading the recorded meeting minutes, you can get a grasp on how this particular HOA board handles issues and whether they are proactive in caring for the community.

Step 3: Review the Budget

Like any well managed budget, there should be clear records of funds (in this case, HOA dues) coming in and bills going out. After all routine maintenance bills have been paid, there should be excess funds remaining to be added to the reserves for big projects and unexpected emergencies. This could be anything from repairs to a community dock if you’re on the water, a new roof for the neighborhood clubhouse, or removing downed trees after a storm.

Step 4: Is There A Reserve Study?

A reserve study is a study commissioned by the board to identify future expenses. The study should take into account the age of the complex, as a newer development may not need as many major replacements, repairs, and updates as an older development. The HOA should have enough funds in their reserve to cover 70-90% of the projected expenses found in the study.

Step 5: Discover Pending Special Assessments

On occasion, when the HOA does not have enough funds in their reserves to cover a major repair an assessment will be issued to residents to collect the needed funds. This can be a one time payment or, if the sum is larger, it may be collected across multiple payments. Though an additional payment can seem like a negative, the update will benefit the overall value of your home in the long run.

Step 6: Review the Insurance Policy

While the HOA will have an insurance policy protecting the community in the event of a catastrophe, that policy may OR may not cover the interior of your unit and will definitely not cover your personal property. You will want to provide a copy of this policy to your agent when securing additional insurance for your home and belongings.  

Step 7: Know the Rules and Regulations

Often, when living in a shared space community, there are rules that residents agree to live by. These rules can include quiet hours, pet policy, home renovations, rental policies, etc. It’s a good idea to review the rules before you commit to live by them.

Note: Purchasing a condo or townhome may be more complicated than buying a single family home, which is why it is important to have an experienced real estate expert on your side. With the collective expertise among the Realtors on the Luxury Simplified Real Estate team, we know what to look for and how to advise you when it comes to a condo or townhouse purchase in Charleston SC.