As is the case with many questions, the answer is “it depends.” There are many factors that come in to play when a homeowner’s association determines how much the HOA fees will be. A home owners association, sometimes also referred to as a property owners association or POA, is the governing body that sets the amount of the HOA dues.
What do HOA dues include?
In most cases, in the Myrtle Beach area, these HOA dues are charged monthly. But there are some cases that the homeowners association will charge the POA fees quarterly instead of monthly. But, how does a HOA determine how much these fees will be. Well the simple answer is that the homeowners board will conduct and annual budget to determine the costs of maintenance, grounds keeping, and general costs to run the operation. That cost is then divided out among the individual owners within the property. But this does not necessarily mean that each owner pays the exact same amount. In many cases the amounts charged to each owner can be an amount in proportion with the size of the units themselves. For instance, a 1,200 square foot condo owner may pay less per month than condo owner down the hall who owns a $1,500 condo. Or it could be that all 2 bedroom condos in a building pay one monthly HOA fee while the 3 bedroom condos in the same building pay a different HOA fee.
What else do HOA fees include?
Let’s look again at the costs that a homeowners association could incur that go beyond just the costs of the grounds and out door maintenance. Generally, homeowners associations cover all “exterior” maintenance. That would be anything outside the of the interior sheet rock walls of the condo. So this means hallways (carpeting, lighting, cleaning, paint,etc) foyers, elevators, landscaping, parking lots, parking garages, pool maintenance, and the biggie, insurance would be part of the obligation of the home owner’s association. In coastal areas like Myrtle Beach, insurance can be a big factor. So it is important that when you look at the HOA fees, to check to see if this includes the building insurance. Building insurance or hazard insurance generally means that this financially protects against damage done by storms, fire, or earthquakes. But this does not always include damage created inside. For this, most owners will need to get their own HO6 policy. You can read more about HO-6 policies here. As of late, there have been more home owners associations who will also buy these policies on behalf of the owners, but pass on the expense of these to the owners through the HOA dues. Some homeowners associations factor in the cost of the insurance within the monthly or quarterly HOA dues but some associations bill it out once a year with the building insurance premium is due. So what may seem as low hoa fees are actually increased overall when you pay the annual insurance premium.
Another thing to keep in mind is that just because the HOA has insurance, there is generally a deductible that would have to be first met by the association before any insurance claims are paid out. Well guess who pays the deductible? The HOA does, meaning the owners do. For this reason, some of the more prudent associations will build a “reserve” in the cases of these unexpected expenses. This reserve accumulates when these HOAs factor in a reserve amount within the HOA fee to be paid by the home owners. So let’s say a POA charges $320 per month to the homeowner. It could very well be that $270 of that amount is used to cover costs and $50 is allocated towards a reserve fund.
As you can see, there is a lot that goes into this and there can be some trap doors along the way. At the same time, the HOA dues that are paid is not necessarily throwing money out of the window. In many cases you HOA dues also cover water, trash, and even cable. Keep in mind that paying the maintenance and upkeep on an individual home could be far more an expensive than what your HOA dues are covering. Therefore it is prudent to utilize the services of an experienced and knowledgeable Myrtle Beach real estate agent to help you navigate these uncertain waters when determining which options are best for you. Meanwhile, feel free to view some of these properties here:
View these properties with the lowest HOA fees in Myrtle Beach