What is HOA?
When investigating US real estate, you will often come across HOA costs. This stands for Home Owners Association. The closest equivalent in Australia would be strata costs when buying an apartment. The difference is that in the US HOA fees can apply to any kind of dwelling, not just apartments. For example, many gated community properties, which are stand alone dwellings must pay HOA fees, which are normally calculated per month. These fees can be quite hefty so make sure, as part of your due diligence you enquire what the HOA fees are, whether they are in arrears, are they due to increase, and anything else that may cut into your costs. Often a property may appear to be cheap for its location, but the HOA fees are relatively high based on an array of factors. HOA fees, like strata fees in Australia, should be used for overall management of the building or development. HOA fees, as with strata fees in Australia, are tax deductible for investment properties.
