Homeowners associations, or HOAs, are growing increasingly common as real estate developers work hard to maximize open land and buyers recognize the value of shared amenities.
If you own a home that's part of an HOA, you may have contemplated joining your HOA board, only to change your tune to avoid having to invest the time. But while you may be OK with leaving the decision-making to others when you're a regular homeowner, as an investment property owner, it's especially crucial that you land yourself a spot on that board. Here are three reasons why.
1. You can protect your property's value
The decisions your HOA board makes could impact your home's value, and that's important when you may be looking to sell it at a profit or rent it for top dollar. It's the job of an HOA to make sure all homes that fall under its purview get maintained properly and all common areas and grounds are subject to regular upkeep. Falling down in either regard could cause property values in your building or complex to sink, which means you stand to suffer serious losses as an investor if you don't intervene.
2. You can influence more favorable rules for rentals
Some HOAs forbid rentals completely. Others allow them but make the process extremely burdensome for landlords. If you own an investment property you intend to rent out, getting on your HOA board could make it easier to secure that steady income stream, especially if you're able to convince your fellow board members to impose fewer restrictions.
3. You can find ways to make your dues cheaper
The higher your HOA dues, the more they'll eat into your profits as a real estate investor. If you join your HOA board, however, you'll be in a position to suggest concrete changes that result in a lower monthly fee for residents of your community.
You might, for example, manage to leverage your relationships with local contractors to save your community money on ongoing maintenance. Or you might suggest cost-cutting measures that allow everyone to save without skimping on upkeep. Granted, you'd have every right to make these suggestions as a regular member of your housing community, but joining your HOA board will give you more of a voice.
The bottom line
Joining an HOA board requires a time commitment. You may need to attend extra meetings, and you'll probably be forced to deal with issues that wouldn't otherwise be your problem if you were simply a regular homeowner in your community.
On the other hand, if you manage to snag a spot on your HOA board, you'll have a solid opportunity to protect or even increase your home's value, create a better set of rules for landlords such as yourself, and find ways to save a fair amount of money for all members of your community, yourself included. For these reasons, it's worth sitting through those potentially lengthy meetings -- even if there are other things you'd much rather do with your time.