When Are High HOA Fees Worth Paying?

A high HOA fee isn't always something to worry about.

When you buy a home, there are many costs to look at to make sure the property is affordable, including homeowners association (HOA) fees. HOA fees can sometimes be hundreds of dollars per month. And you pay these added charges as long as you live in the home (unless there's a rule change, which you can't count on).

If you're looking at a neighborhood where the homeowners association charges a lot, make a careful assessment of whether those fees are worth paying.

High HOA fees make sense in certain situations

Costly homeowners association fees make sense when a lot of services or amenities are included in the cost of your dues.

For example, in some cases, homeowners associations take care of the landscaping around your home and even maintain swimming pools. Some HOA services also include internet, basic cable service, trash pickup, and other utility-related expenses.

If your association pays for these services that you would normally pay a professional to do (or that you would have to do yourself), the fees may be well worth it. Not only do you save time and money, but you avoid the hassle of finding and paying service providers.

When a homeowners association takes care of many tasks, you often give up a substantial amount of control over what you do with your property. For example, if the association maintains the exterior, you may have rules about what kind of grass you can plant. So be sure you're comfortable with the rules as well as the fees.

HOA fees may also be worth it if you get access to community activities and amenities. Some neighborhoods aim to be like resorts for their residents. They may have swimming pools, water parks or lazy rivers, on-site restaurants, or a 24/7 guard gate. If you take advantage of the perks of living in a neighborhood, you may find them worth paying high association dues.

At the same time, remember that even if you get tired of the pool or your kids no longer partake in the neighborhood kids club, you're still stuck with these fees for the entire time you're in the house -- so think about whether you'll use the services over the long term.

Even if the fees seem worth it, make sure you can afford them. As you consider how easily your monthly payment fits into your budget, factor in the fees as well as mortgage payments and property taxes. If these expenses are so much that you can't pay them and accomplish other financial goals such as saving for retirement, then the house probably isn't right for you.