Aside from overseeing the day-to-day operations of the community, homeowners associations have the herculean task of increasing property values. This is because homeowners expect a return on their investment — after all, monthly dues don’t come cheap! Hence, even if the real estate market largely regulates the prices of properties, associations still hold significant power.
If you own a multi-family property in South Florida, you should consider creating a homeowners association (HOA) or condominium owners association (COA). Not only will the association help you handle your residents, but it will also assist in increasing property values. As a property investor, you’re probably aware of how crucial this can be!
How can an HOA increase property values?
We know what you’re thinking — an HOA handles the external premises, not the properties themselves, so how can they possibly increase property values? We’ll explain why.
It doesn’t matter if your residents regularly maintain their properties. It doesn’t matter if their properties are pristine. Property values are dependent on different factors, including those that are beyond your residents’ control. For example, dozens of dilapidated homes in one neighborhood can significantly reduce the value of a single property. Similarly, the removal of recreational spaces can reduce the community’s appeal.
The HOA, particularly the Board of Directors, represents the residents. HOAs are responsible for enacting and enforcing rules and regulations that protect the best interests of their members. If you own a single-family home in an HOA-regulated community, you’re probably familiar with the Covenants, Conditions & Restrictions (CC&Rs). These define what homeowners can and can’t do. For instance, they may not be allowed to build a storage shed, as it is typically considered as an eyesore.
Wondering how else an HOA can increase property values? Here’s a closer look at what HOAs do behind the scenes:
#1 They create an enviable community
HOAs know how to create a community that everyone in South Florida will want to move to. With an HOA board at the helm, you can bet that your community will be the envy of all other communities. This is because they’re residents themselves. Hence, they have a deeper understanding of what they want, whether it’s a tennis court, swimming pool, or clubhouse.
Plus, communities with HOAs tend to be more close-knit. To outsiders, the thought of living in a welcoming community is enough to make them want to move there. As a property investor, this means you’ll have more potential buyers.
#2 They keep up with upkeep
Homeowners are responsible for making sure that their homes are picture-perfect. On the other hand, HOAs are responsible for maintaining the area around the homes. Even if your neighborhood has beautiful art nouveau homes, property values can still plummet if the surroundings are shabby.
To ensure that property values steadily increase, HOAs handle landscaping, tree trimming, repainting, etc. in public places. They take care of these tedious tasks so that you don’t have to.
#3 They maintain curb appeal
HOA rules are often considered overkill, but they’re there for a reason. HOAs enforce restrictive covenants or rules that enhance the community’s overall curb appeal.
For instance, homeowners may not be allowed to paint their homes a certain color. They may also be required to take out their trash only at certain times during the day. If you’ve ever lived in a condominium, you’re probably familiar with the “no laundry in the balcony” rule. These rules may seem restrictive, but they result in higher property values.
#4 They pay attention to details that matter to them
Who are the members of an HOA? Homeowners.
Since homeowners are at the helm, they can enforce policies that protect their interests. If you, the property owner, managed the multi-family property by yourself, it’s unlikely that you’ll think of every little thing — unless, of course, you’ve hired a property management company. Regardless, unless you’re an actual resident, it will be difficult to pay attention to the details that matter.
An HOA, on the other hand, can do more. That’s because they notice these details daily. If they notice that the streetlights aren’t bright enough, they’ll take action in order to protect their family members who walk alone at night. If their children complain about broken swingsets, they can notify the association manager instantly. It makes all the difference.
How can an HOA cut operating costs?
HOAs have a lot of expenses, especially since they’re responsible for regular maintenance and repairs. Hence, it’s important that they cut their operating costs. By doing so, they won’t have to worry about their financial health.
HOAs usually have an HOA secretary that keeps tabs on the association’s expenses. Sometimes, an HOA even hires its own accountant or accounting firm to help them pinpoint its “problem areas” so it can cut its costs accordingly. It’s also common for HOAs to hire a property management company that can advise them on how to reduce their expenses.
Aside from accounting, HOAs also help cut the property investor’s costs by being responsible for maintenance and repairs. Since the HOA is staying on top of these things, the property investor (in this case, you) won’t have to waste thousands of dollars on long-overdue repairs. In other words, the HOA can stop issues from escalating into expensive disasters.
HOAs also use association management platforms that cut communication costs. This is particularly useful when residents need to be notified about repairs, payments, and the like. With their help, you won’t have to personally deliver notices to your residents.
If you want to increase the property values in your community, you should consider forming an association. One of the main benefits of having an HOA is the protection of property values so that your community attracts tenants and buyers year-round.
If your HOA or COA ever needs help, you can always count on an association management company or property management company such as Luxury Property Care. We’d love to share our experience and expertise with your HOA or COA. Call us at (561) 944 – 2992 or complete our contact form to learn more.