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When purchasing a condo or townhome you will become part of a home owner’s association, also known as an HOA, by default. An HOA is originally created by the builder or developer to define the management of the community. After a majority of the units have been sold, the management of this association is transferred to the home owners.

Many HOA rules are pretty standard and will be found in almost any association. These primarily include the federal and state mandated covenants regarding discrimination. Other rules that are common concern the maintenance requirements for each unit owner, limitations on what can and cannot be attached to units, fences, painting, noise, parking, etc. While home owners cannot change or alter bylaws that are government mandated, most other rules can be amended by a majority vote of the members.

The Home Owners Association may be managed by either an outside management firm, or by the home owners themselves, after they elect a Board of Directors. Outside management companies will charge the association a fee for their services, which will increase the amount of the monthly assessment.

HOAs have popped up all over the country as municipalities, and many have found it economically advantageous to have housing developments assume responsibilities that previously had fallen under city jurisdictions. In some newer areas, the Home owner Association may find itself responsible for street, sidewalk and sewer maintenance. Often a builder is given a tax incentive to build developments with common areas, which shifts the creation and maintenance of storm water collection, run off and green areas (mini parks) to home owners as opposed to the municipalities. This means the homeowners become responsible for maintenance of the parks, which saves the cities money.

Homeowner Associations charge dues which can be assessed monthly, quarterly or annually. For condominium units that share walls, roofs, and common areas, the dues typically cover maintenance of the structures and common areas as well as what is known as “walls out” property insurance. Walls out insurance will cover the walls and roofs of the buildings, but does not insure against damage, in case of fire, water, or other elements inside the unit.

The HOA bylaws and insurance policies are subject to approval by lenders. Because of recent lender guideline revisions, many associations are finding themselves scrambling to comply with new lending rules so current unit owners are able to sell and new buyers are able to obtain financing to complete their purchases.

If you purchase a home which belongs to an HOA, you are taking part in all the advantages that the HOA offers, such as amenities, but you are also taking on the responsibility for maintaining all those amenities. When you make an offer on a home, you should be provided with the documents covering the bylaws and covenants for the community. Often, your real estate agent can discuss this documentation with you. This allows you time to review the rules, and become familiar with the amenities prior to making a final decision about the purchase.

Some things to consider prior to making your final purchase decision:
1. The financial soundness of the HOA
2. The amount of the monthly dues
3. The amenities included and the condition of those amenities
4. What the HOA insurance covers
5. Is the HOA being run by the home owners or a management company
6. Is there any outstanding litigation against the HOA? The developer? Any subcontractors?
7. HOA history regarding special assessments.

It is also recommended that you make some time to talk to other home owners in the development. Unfortunately, developments that are self managed can end up with “power hungry” home owners who appear to have nothing better to do than harass their neighbors. This is definitely something you would want to know, wouldn’t you?

If you are purchasing a White Rock or South Surrey, BC townhouse, call on Red Dot Real Estate , a real estate broker with $1 billion in sales since 1981. They can help guide you through the real estate market as well as understand regulations of local home owners associations. Distributed by SEO 2.0 Services

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Buying a dilapidated old home and fixing it up will increase its worth dramatically- putting you in position to sell it and make big profit. If you are tired of all the basic renovation techniques being discussed, start finding out more about creative ways you can expand the home’s worth.

If you end up owning the home over tax season, you should look into obtaining any tax credits you possibly can. Most often with homes, tax credits can be obtained by initiating “green” projects. This could be something such as installing a compost system or insulating the home to a new degree. Hopeful home owners love having the green features in a home, and the renovation artist still gets a tax credit.

Psychology can be a big factor when coercing a couple into buying a home. Buying all new appliances for the home is extremely important, as it creates a sense of luxury that the couple most likely didn’t have at their previous location. Have the appliances match in color and style and be sure to call attention to them- you may be surprised nearly every open house brings remarks on the subject.

Lighting is just as influential to an onlooker than appliances. If you can create a homely mood with lighting, you are sure to win the hearts of those looking. Halogen bulbs are great for this, but you can also investigate xenon lighting and such. Don’t get too extravagant, as no one likes a gaudy or obscene lighting structure. Also keep lighting fixtures to a stylish but bare minimum.

If you can offer a gimmick that shows a home owner they are missing out on a luxury, you will be able to greatly raise your interest in a home. Pools are a good start, but they can be hit or miss with some people due to safety concerns, and are generally expensive. Instead consider something simple like a fire pit, where stone seating and a dug out pit allow home owners to entertain guests.

Expert renovation artists like to buy different items such as large screen televisions, impressive sound systems, and extremely nice furniture to fill the home. In doing so, they hope the visual appeal will rub off on the onlookers. Of course, furniture and items aren’t commonly sold in a home sale, so renovation artists are able to pack it up and move it to the next spot as soon as they are done.

Closing Comments

Renovating property can be fun and profitable- there isn’t much more you could ask from it. Do your market research beforehand, judge real estate supply and demand, and continue your operations from there if things are looking like they will be smooth sailing.

Learn more on Property To Renovate and Renovate Alerts.

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