HOA Fees and Maintenance Costs Erode 2021 Home Buys
Homeowners are experiencing regret over their purchase decisions, driven by unexpected costs (HOA fees, maintenance), financial strain, and a lack of long-term satisfaction. The initial affordability of homes bought in 2021 is now being challenged by rising expenses and changing life circumstances, leading to questions about whether homeownership was the right choice.
SOURCES (60)
“More of a sinking fund. Generally assume you will spend 1-4% of the value of your house per year on repairs. Save that and also three months expenses. imo at least 10k”
“I'm sceptical. Fundamentally it doesn't make sense that you can build a room in an exisiting house and suddenly that house is worth double the value of the cost to build that room more because the person buying the equivalent home could just do this same work themselves for much cheaper. Are the homes with the additional bedroom identical in square footage and all other factors? When you say a master suite addition costs 95k, how do you know that? Might it cost more in reality than you o”
“Foundation repairs can be one of the most expensive repairs out there. Plus 99% of the time it'll reveal additional issues that would suck out more money. My opinion is to just leave it.”
“My advice is run. This likely is just the beginning. Foundation issues and water in the basement issues tend to be bigger issues and more expensive then you realize.”
“foundation work is one of those things where contractors will quote wildly different prices cause they each see different solutions, get at least 3 quotes before you decide anything. the spread you got from 22k to 49k tells me someone is either over-engineering it or someone is cutting corners since you're past the option period you got less leverage but not zero, you can still negotiate with the seller especially if this is a major structural issue they'd have to disclose to any future”
“When you have an emergency fund this is a non issue. Once you have that set up you basically save to do what you want, and if urgent home stuff comes up you use the emergency fund and then rebuild it. I have a home maintenance and upgrade schedule and items are listed as must do and nice to haves. Things like cabinet upgrades bathroom remodels and flooring replacement are in nice to have. Things like water heater, furnace, A/C, and appliances replacement or repair are listed as must do as those”
“OP says in their post they make 12.5k/month and pay 1800/month mortgage all in. They should have plenty of money for renovations if they want them. Sounds like they are just burdened by anxiety and trying to justify quality of life improvements by thinking of them as a financial investment. OP, if you’re reading this, just go for it! You are on good track for retirement and seem to have plenty of income. You are allowed to spend money on yourself.”
“I’d do it temporarily but would set a goal to move somewhere cheaper within a year and then throw the rent difference into retirement and savings.”
“Find a way to add rooms. I replaced the living rooms with bedrooms to make the cash flow worth it.”
“ngl this is smarter than half the "consultant" advice in here, actually talking to people who went through it instead of guessing 😉”
“The $3-5k usually isn't coming out of the resident's monthly cash. It's often a house sale, kids pooling money, or long-term care insurance, so the "nobody has disposable income" gut check can be wrong for this category. Before renovation math, talk to a few adult kids who recently placed a parent, plus a hospital discharge planner or placement agent, and ask how that last placement got paid. Also call 2-3 nearby RCFEs and ask about occupancy/waitlist. Those conversations t”
“Before you do this, sit down and talk with a CPA or tax professional to get a full understanding of your after-tax cash flow. It may be much better or worse than you envision. If you do proceed with the purchase, make sure you maintain a hefty cash reserve to cover emergency repairs. They always come up at the most inopportune times, and as a LL you don't have the option to just put if off until your finances are better.”
“You need to frame this as: I am paying $3300/month mortgage. $250/month is relatively safe equity for the first year. So let's pretend your mortgage is really only $3050. The rest is going to taxes, insurance, and finance charges. That money is gone, not invested. Now, you can make $1500/month. That $1500/month makes it so it feels like your rent has more or less not changed and is $1550 (pretending to exclude the $250 equity that is like a forced savings. You don't get a choice- you'”
“It most likely will be worth it in the long term. However, you will also have to be a landlord on top of being a new homeowner. Make sure you understand and accept those risks as well. Make sure you have some buffer in case something goes wrong and you need extra money for an unexpected expense. You will need it and it's usually sooner rather than later.”
“I'm moving to a new town. I'm ... 90% sure I want to live there. I was planning to rent for a year or two before buying, but the rental market is a little nuts. Very much a landlord's market. Weirdly, the condo market is a buyer's market. (Or not so weirdly considering the HOA fees average like $800/month.) I found a condo offered at $240k. I can afford that easily, even with with added 800. However, I worry about buying and then regretting the move. My possibly-stupid question i”
“My wife and I ran the numbers, buying makes zero sense financially. We have cheap rent, buying would cost us at least 2X more per month aside from loosing a downpayment and investing opportunity cost. Even with trying for kids, assuming she gets pregnant tomorrow, you have at least 9 months before being born, and you don’t need that much more space with an infant. Also- waiting to buy until kids to then see what your new income/budget is a great idea. You don’t want to become house poor and have”
“Can you just keep lowering the price until it sells? You don’t really have the income to keep hoping for a better price on the home”
“It's not worth it you're right. Mostly because the stock market is a better choice. Buy a house with a big down payment”
“your intuition about the market isn't wrong but it's incomplete, the people paying $3500-5000/mo aren't doing it from disposable income, it's often Medicaid waiver programs, long-term care insurance, or families pooling resources, and RCFEs fill a real gap between expensive nursing homes and sketchy in-home aides. the part that'll actually kill you is the operational side, not demand, licensing, liability insurance, 24/7 staffing, and one bad fall lawsuit wiping out a year of”
“I understand where you are coming from here. And there are multiple levers in play here.The cost of a mortgage underpins the rental value. If there are multiple units for rent then there will be a "going rate" and that's certainly a part of the equation. In that sense some landlords get more cream than others, but that's capitalism in action.There are however other costs that go into rental calculations. Perhaps the building has a supervisor, or rental agent. Perhaps utilities are included. Ther”
“Seems like your property is in a good area so you'd find good rent but youd have to take in account the maintenance and stuff. Otherwise its a good enough deal”
“"Obviously selling any real estate you make money on is a poor financial decision" See, I don't agree with this premise. But regardless, here's another way of looking at it. Let's say you can sell your rental house for $500,000 in net proceeds. Imagine now that you don't own that house, but you do have $500,000 you're debating what to do with. You see that house on the market and you can get it for $500,000 after all commissions and other expenses. Would you buy the”
“if the move genuinely doesn’t lower your quality of life, downsizing and investing the equity is the more rational choice, just remember that $700k is the napkin number before selling costs and taxes”
“I would invest it, before I built this house I had $300k invested and the daily fluctuations(gains) and safety that came with knowing that money was there. We’re both very nice to have/look at. If I needed money I’d probably borrow against it instead of selling it.”
“If construction and recourse are hard nos, SB-9 or ADUs will eat 18 to 24 months before seeing a dollar of rent. Buying existing multi-family with active leases or NNN gives immediate cash flow with predictable numbers.”
“Have you checked out Las Sendas or Mountain Bridge? We checked out Scottsdale and it is so full of broke pretentious people. Scottsdale is overpriced. At $200k you are at the bottom of what it takes to own a home there. I agree, no way I would live in Chandler or Gilbert. Las Sendas or Mountain Bridge area has low traffic and is quiet. Keep renting if you must be in Snotsdale.”
“Personally no way I’d buy a weekend house if I had to be in office 5 days a week. Conventional math says not to buy a second home unless you will use it for an least 1/3 of the year. If you’re serious about it anyway, rent and do the drive to get a real feel for the out and back during the times you’ll actually be going. Do that for 15-20 weeks and I think you’ll conclude that it needs to be within 90 minutes max, measured on Friday afternoons.”
“If you have a 15 year old roof inspected four years ago, get told it has 10-15 years left, and then a particularly gnarly winter/heavy storms/etc causes multiple leaks, is that do enough damage where replacing the roof is required, is that maintenance or an emergency? I’m saying that I don’t care. If I’m going to 100% cash flow with 0 debt m life, I need a lot more funds than just “6 months expenses”- many people wipe out over half of it for a new HVAC system and don’t have maneuverability anymo”
“I’m not in your shoes, in fact probably quite different in many respects, but with that caveat, I’d say it makes relatively little sense to buy. Just rent when you want to. Even if that means renting for 30 weekends per year. 1) you don’t have to worry about maintenance and upkeep of a mostly vacant home 2) you don’t have to find the perfect location or home. Try out a bunch of places! 3) you aren’t locked in for a long period of time. Just do it until it no longer serves your needs”
“avoid an HOA at all costs. I was an insurance adjuster. HOAs are the devil. And the board members are the spawn of satan. Im ok with renting, then taking the money I would have used for a down payment and invest it in some index funds.”
“$217k monthly payment $1320 and HOA $130 every two months. $400k is $3200 monthly”
“Never an HOA. Never. Cant comfortably afford $400k, so neither. You’re never more than a month away from losing your job and expending your savings for 6 months-a year while your same industry goes all-in on AI replacement bullshit. If either of them, I’d go with the country living and no HOA. But.. see previous paragraph.”
“Idk why anyone would want to live in a place with HOA. Also what is considered “long” commute to the city? Like under an hr? Bc that’s it bad really. As long as coming back home traffic isn’t going to make the commute 2 hrs. (Living that now and drive in is mint, drive home always sucks).”
“Numbers on the surface look strong, $3500 rent against a $2000 mortgage is a big spread. But that $2000 number is doing a lot of work here, is that P&I only or does it include taxes and insurance? On a $320k loan, those two alone could easily be another $400-600/month depending on your area, which changes the real cash flow picture. Also worth factoring in vacancy and maintenance reserves, even with a 2 year lease locked in, stuff breaks and tenants eventually leave. If you're netting sa”
“Condos can get weird with DSCR because the lender may underwrite the HOA/project too, not just your unit and rental numbers. High investor concentration, pending litigation, low reserves, special assessments, insurance issues, or short term rental restrictions can kill eligibility. I'd ask the lender exactly which condo guideline failed and whether another DSCR lender has different project requirements.”
“Lot of REALLY dumb comments in here. It may make sense to rent at half the price until you’re fully settled or if housing stays flat a while longer. Renting you get zero at the end. Pita and maintenance will almost always be cheaper than rent and I highly doubt there’s ever been a 30 yr period that housing hasn’t at least doubled. Your costs will rise but likely less than rent would. I’m baffled at some of the top response”
“I live in an area where rent increases are capped at 10% per year, so the apartments raise rent 9.9% literally every year. My mortgage is basically set in stone aside from tax increases. In a few years, I'll be paying less on my mortgage than I would have been while renting. Yes, I still have to pay for maintenance and I put that into my calculations. I'm still building equity in my place. I get that I shouldn't be assuming it's an investment and will be increasing in price. The”
“34 here. I'm renting a 2100 sqft house for $2300/month. In my area, the typical rental is about $1.50 per square foot. My house should cost more than $3k/month to rent, according to the market. To buy the house I live in would mean taking more than $100k out of the stock market for a down payment. Then my monthly cost to "own" would be about $3,540. On month 1, I would only pay about $370 towards principal (WOW, equity!!!1!). I would pay $3,170 towards mortgage interest, taxes, HOA”
“I never would have amassed $2 million in retirement accounts had I been paying a mortgage/homeowners insurance and property taxes in my VHCOL area if I’d owned. Luckily my rent is and has always been below market”
“Do the math. If it doesn't make sense, it doesn't make sense. Eyeballing this roughly, unless real estate home value appreciates in Scottsdale plus rent costs increase by more than ~10% annually, and your life expectancy is less than an additional 60 years, it doesn't make sense to own vs rent if the price differential for the same square footage is 2x.”
“Both are similar price range. The house is further from the city and also needs TLC and the co op house is in the city area submitted by /u/frontlinestatic [link] [comments]”
“I don't get why people see their homes to be an investment. You need to pay property tax, which is a percentage of its entire worth unlike equity tax and then when you sell your home, you still have to either buy another one or rent another one. Let's say your "investment" has gone up. Unless you're going to downsize or move to a worser area, you will pay even more for your next home. And, downsizing doesn't happen in America.”
“I currently inherited a three bedroom one bath house with a Zillow value of around $700,000. It did skip a generation and therefore I had to pay a lot of taxes on it. Currently, I want to sell this house and use the proceeds from it to buy my family and I a new home. To be clear, here are some of the financials on it: Rental: Inherited at $520k Valued at $700k Heloc $195k ($1,600/mo of $3,400monthly before expenses/taxes etc) Net $505k How can I estimate what the property gains taxes cost will b”
“I’m in a similar situation and after a lot of thought decided to sell and move into a condo. It’s a hard decision , as my current home is all but guaranteed to appreciate and I will lose some of the wealth I worked hard for, but due to mobility issues we can’t enjoy it like we used to and upkeep is challenging physically and financially. My daughter is excited about the pool and location and will not have to switch schools. With less financial stress, we can afford more activities and vacations”
“Not enough numbers or facts to give a clear recommendation but if you can move in to a house half the size it sounds like you could potentially separate off half the house as a rental unit. Which in a good neighborhood could be worth more in the long term. Especially if you got below market rate interest on your current mortage.”
“I have a feeling the transfer costs will take a lot of the benefit out as it’s not cheap to sell and buy a house. Not only that, but if your current house is a lot more desirable, you’re going to miss out on a lot of future appreciation. Really pencil this out backwards and forwards and get into all the details before making a move, including future values and equity in both properties.”
“Impossible to give financial advice on something with no finances listed. If you can afford the current house just stay. If you can’t downsize and pay cash solving the problem. Your daughter will still have her room so she will live. When she’s older and understands mom/dad sold the big house so they wouldn’t lose the house and dad almost died so he wants to retire earlier she will get it. Maybe not now but 10 years from now she will.”
“So you have $3mm in equity in a home and a $15,000 a month mortgage you are paying on? How damn expensive is this home? You are no way near close to done if you plan on keeping this home.”
“That is way too much in real estate. How much revenue are you getting from the rental? Here is my take: if you sell the rental real estate, downsize to a cheaper house (how much equity you have in there?), and cut down on expenses (which you will I'd you downsize the mortgage), you MAY be able to take it easy. It's not FATfire though, barely even chubby fire. You could look into barista fire and take it easy.”
“Without knowing your husband’s income and savings rate, hard to say, but with that much of your NW tied up in personal use real estate, it’s not looking good. Real estate is consumption, not an investment. You need to get your investment portfolio up about 6x to get to Fat.”
“Even though they are assessed/taxed as residential and subject to a residential condo declaration?”
“No, that's under the loan minimum. DSCR programs start around $100k, so it's cash either way. And read the declaration before buying 10: most Illinois condo parking is a limited common element allocated to a unit, not a separate PIN an outsider can hold.”
“The process- it requires a lot of coordination with the HOA company as many require more detailed reports/application you mentioned via gpt. At the end of the day, you are at the mercy of that management company’s willingness, often one person to help you who already has their overflowing main responsibilities. In the meantime, rates will change and more often than not, the rates will increase”
“There are way more single family homes on the rental market than the past few years. I think people with low interest rates mortgages are buying new places and renting our their homes that have good rates.”