3 Pros and Cons of Buying a Home in an HOA

Owning one of these homes doesn't just mean repaying a lender every month. Here's what to know about an HOA.

In your search for a home to buy, you may come across three letters that give you pause -- "HOA," short for "homeowners association." HOAs are most commonly found in townhouse communities, though in some cases, standalone homes can be part of an HOA. And while HOAs have their benefits, they also have drawbacks. Here are some of the pros and cons to know before you make an offer on a home in an HOA.

Pro 1: Access to amenities

Homes that are part of an HOA generally have shared amenities -- things like tennis courts, a community gym, or a pool -- that can be harder to come by in a standalone home. Having access to those amenities could enhance your quality of life.

Pro 2: Your home may be less expensive

If you buy a townhouse in an HOA, you'll generally spend less for that home than you would for a comparably sized standalone home (a home that's not attached to another, and sits on its own plot of land). The result? Lower mortgage payments.

Pro 3: Less maintenance to do yourself

When you own a home that's not part of an HOA, you're responsible for all the maintenance. It's on you to shovel the snow, trim the grass, and do (or hire someone to do) whatever is necessary to keep that home in good shape. With an HOA, you may only be responsible for interior property maintenance, while your HOA covers outdoor maintenance like lawn mowing. However, this generally applies to HOAs that are townhouse communities. If you own a standalone home in an HOA, exterior maintenance may also be your responsibility.

Con 1: High monthly dues

Those amenities we just talked about? They come at a cost -- your monthly HOA fees. The more amenities your housing community offers, the higher those dues are likely to be. And even if your HOA fees fit into your budget initially, they can rise over time.

Con 2: Lots of rules

HOAs don't just charge you a fee and cover maintenance -- they also set rules. If you're part of one, you may be restricted in certain aspects of your life. For example, your HOA might dictate that you can't run a business out of your home, or you can't have a certain type of pet. Your HOA might even say you can't paint your house a particular color.

Con 3: Less privacy

If you buy a townhouse that's part of an HOA, you'll share at least one wall with a neighbor. The result? More noise and less privacy. Furthermore, if you buy a standalone home that's part of an HOA, you may find that more properties are crammed into a single development than you'd normally see. So even if you don't share a wall with your neighbors, there may not be much space between your house and your neighbors'.

Buying a home in an HOA isn't necessarily a bad idea -- but it may not always be a good one for everybody. The best way to decide is to weigh the pros and cons. You may come to the conclusion that it's worth paying a monthly fee and having rules to adhere to if that also means having a private playground for your kids to enjoy year-round. Ultimately, it's a personal choice -- the key is to know what you're getting into.