Deciding on what responsibilities and lifestyle you want can help you make the right decision when purchasing into an HOA.
Purchasing a home now a days can lead to a lot of questions. Do I really feel like mowing my yard every week? We live in Minnesota. Do I really want to bundle up every time it snows and go out and shovel my drive way and sidewalks? Do I want to climb up a ladder and clean out my gutters or fix my loose siding?
If you rolled your eyes or answered with an enthusiastic “NO” to any of those questions, then you should consider buying into a Homeowner’s Association (HOA).
When you think of an association, you usually think of townhome style or condominium buildings. But what is the big differences between the two?
Defining the differences
When you purchase a condo, you own the space within the unit. Typically, the boundaries are defined as the unfinished surfaces of perimeter walls, floor and ceiling.
Condos may have either private exterior entries (like a townhome) or a common entry shared by multiple owners with a separate interior entry (like an apartment building). All owners share ownership in the land and improvements outside the units.
An owner of a townhome owns the land, the dwelling, and property improvements located in and on the lot. Most townhome associations are comprised of row homes, twin homes, or quads. Each townhome will have a private exterior entry. All owners share ownership in the property and improvements on property located outside the lots.
Most townhome associations are comprised of row homes, twin homes, or quads. Each townhome will have a private exterior entry. Another common feature of most townhouses are they are at least two or more stories.
Amenities
An amenity of a property is a useful feature that all owners of an association have access to. This can include a swimming pool, fitness room, party room, or a park. Condos are usually more community focused and feature more amenities than townhome associations.
HOA Dues
Regardless of whether you decide on purchasing a condo or a townhouse you are going to have to pay association dues on top of your mortgage. These dues are pooled together and used to pay the common expenses that are the associations responsibility.
For condos, dues are usually higher compared to townhouses. Featuring more amenities that need to be cared for as well as needing to cover exterior expenses including lawn and snow care and building repairs are a big reason into increased dues.
As townhome owners are responsible for all interior as well as most exterior repairs, dues are going to be lower at most properties. Lawn, snow, trash as well as some exterior repairs will be covered by dues.
Insurance Rates
Associations are required to provide a master insurance policy that will cover the structure and usually the exterior of the unit. With that being said, regardless which type of association you want to buy into, you will still have to insure your unit properly. Homeowners will want to purchase an HO6 policy that will cover the interior of their units and any personal belongings like a renter’s policy for homeowners.
As we learned earlier, condos owners are only responsible for the interior of their units. Since that is all that needs to be covered by a policy, the rates are generally lower than townhouses.
Making the right decision
Now that you are more informed about what differentiates condos and townhouses, think about what you are looking for in a home. Maybe either option sound good. Maybe a single family option may suit you better. Whatever the case may be, we are happy to educate you on making the right decision for you.
HOA’s are what we know and with our knowledge and experience, Cedar Association Realty are your condo and townhome realtors. Whether you are looking to purchase or sell your HOA unit, contact us to start your journey.
