Dated: December 22 2019

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Here in Florida we have many homeowners associations (HOA’S) and condominium owners associations (COA’s). Along with these associations come the fees necessary to run them and the expenses that they manage. Today I would like to clear up some issues regarding condo fees and HOA fees and compare these fees to the cost of owning your own home without the associated management fees. In this article, I will breakdown what you need to know when comparing one home to another and you will be able to make a better-informed decision about a home you were thinking of purchasing,

The difference between Condo Associations and Home Owners Associations.

The main difference between condo associations and homeowners’ associations is the properties themselves. Homeowner associations manage individual single-family homes with land and have common areas such as club houses, parks and other amenities to add to their management. Condo Associations manage condos that have a greater percentage of common areas like hallways parking spaces etc. as well as amenities.

Key thing to remember

One thing I always tell my clients, is that they must remember that the associations are not profit centers. The associations simply manage the expenses for efficient running of the community. If you live in a community with an association running it, you must think of the association as an “us” not a “them”. You as a home or condo owner have input in who sits on the board and therefore the decisions and expenses that they choose to undertake and manage for you as one of the homeowners.  I will add this one caveat: during the build out of a community the Association may be controlled by the developer who often will economically contribute to the expenses of running the community, in many cases the expenses will be artificially low because of this. In very large communities the sheer bulk buying of some of the services can often make up for the cost of management of those services.


Compare Prices and What is included

If you have ever worked with me or one of the FOUSREALESTATETEAM agents in buying a home in an Association,  you will have seen a comparison from us boiling down the cost per square foot of the home for the Association monthly fees, and list exactly what is provided with those fees. Generally, we boil the costs down to dollars per square foot per month. For example, a 1000 square foot condo that has condo fees of $350.00 a month I would call $0.35 per square foot in fees. Condo and HOA fees here in Florida vary from between this 30 cent number up to .70 or .80 per square foot/month.

It's important to know what is included because there are major expenses that all homeowners have these days that they either pay directly or their Association will pay. Examples of this are water, Cable TV, Internet service, pest control and insurance costs. In some HOA’S the individual homeowners yard is maintained by the Association as well. In large communities like Pelican Preserve there are sub associations within the master Association more about this later.

Adding an item like basic cable and internet could save you from spending up to $100/month directly.   Yard maintenance could be another $100/month

 Break down the costs into two categories

Costs related directly to your home

·         Exterior of house maintenance

·         Insurance

·         Internet

·         Cable TV Service

·         Pest control

·         Water

·         Lawn and Garden

·         Reserves for these items

Cost related to your community

·         Guard gate

·         Security Patrol

·         Streets, sidewalks

·         Pools, tennis courts, golf, Pickle Ball, etc

·         Liability insurance

·         Common area maintenance

·         Trees

·         Seasonal decorations and plantings

·         Reserves for these items


Make sure to examine who is control of the association at the time you buy in. If the developer is n control there may be no reserves for repaving roads, painting the buildings,  roof replacements etc.


A Special Note on Insurance Costs

Insurance costs can vary a great deal depending upon the age and the code compliance that was in effect the year the project was built. Newer projects have lower insurance costs because the buildings were built to more stringent hurricane codes. Newer buildings also require less maintenance by the way. Within the same community if you compare a duplex to a single family home, the monthly fees on the duplex may be higher but generally the duplex has insurance coverage and exterior maintenance on the building where the single family home does not.


Three general classes of communities

1.       Basic. I sell homes in one community called Palmetto Pointe. The annual fees are very small because the percentage of common area is tiny. The yearly fees cover entrance decorations and security monitoring that's it

2.       Minimal. the next step up would be an unmanned or manned guard gate and a small court or two

3.       Fully Amenitized. Communities with lots of amenities including manned guard gates, roving security patrols, multiple pools, tennis courts, pickleball courts, restaurants, bars, and activity centers including a gym with instructors . These are the most expensive communities but in a large community you can often get many amenities because the size of the community splits the costs over many people. I personally think these communities are a wonderful opportunity for retirement buyers period you will also find that club membership is often separate in these communities.

Let’s compare a single family home of 1500 Square feet in an HOA and in town.

                No HOA                                                HOA

                Insurance            225                                         225

                Yard                       160                                         0

                Cable Internet   100                                         0

      Condo Fee          0                                              413

      Reserves             100                                         0


                                                585                                         638


In the example above I used a fully amenitized community. So the real cost for getting all the amenities is $53/month!  ( Note:  I have added a reserve number that the single home owner  SHOULD add but never does. The professional manages include it in their budget.)


As a buyer you must put a value and a price you are wiling to pay for the extra services and amenities you will get in a community, buy please make sure you are comparing apples to apples.


If you would like to set up a meeting with me to discuss your personal situation, go to www.meetwithgregg.com  I would be a happy to chat with you.  Also visit my video channel at www.greggfous.tips

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Gregg Fous

Real estate has been my passion since I took my first Al Lowery class on real estate investing in the 1970’s. I vowed during that class that I would buy one property a year. Over the next five ....

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