Is $700 in HOA Fees "Cheap"? Let's Discuss

An anonymous reader left this comment on the West Ocean Two Auction Results post:

I guess you must have never owned a nice home. I easily payed [SIC] between $1000 to $1500 per month to maintain my home which included lawn service, pool service, utilities (which should be very minimal in a condo) and ongoing maintenance. Therefore $700 per month seems pretty cheap to have all this taken care of for you.

Okay, I'll bite.

First, why would start off your comment in such a condescending, dismissive tone? I think your perspective is an interesting one, and one that could have started a worthwhile conversation about the merits and disadvantages of high HOA fees. But yikes.

You are correct in your guess that I "have never owned a nice home." And as you've established, you clearly have. And your home was SO nice that you "payed" $1,500 a month to maintain it. We are all very impressed.

And although I've never owned a "nice" home, I've lived in plenty of them (the one I grew up in and rental situations) and I understand that there are significant maintenance costs involved (especially with a pool). This is why I always tell my readers to factor in those costs when calculating a housing budget. My basic calculations do not factor in broken water heaters.

I welcome your unique perspective, especially because there are certainly some advantages to HOAs (insurance included, some utilities, some basic repairs covered) but I strongly disagree with your claim that $700 per month in HOA fees is "cheap." I think that is utter nonsense and you have failed to convince me otherwise. When compared to a large 2,500 square foot house with a rock pool and 1/4 an acre of lawn, sure, I guess $700 a month for a condo seems like a smoking hot deal. But those aren't legitimate comparisons.

This is because lawn service, pool service, utilities and ongoing maintenance costs in condos are split by hundreds of tenants, making a paltry 40% - 50% discount from the maintenance costs of a large, private, detached home with a pool and yards a total, unabashed rip off. Yes, there are more individual units to maintain in a condo complex, but with new construction and a collective HOA system, costs should be much, much lower to make any kind of rational sense for a homeowner.

Second, without knowing more about your "nice" home, I'll have to assume that with an $18,000 annual maintenance bill, it was quite large.

Condos at the West Ocean Two, as you know, are not.

They are about a third of the size of a "nice" home (with shared walls and no yard to boot). Given that fact alone, condos SHOULD have lower operating and maintenance costs! Much lower. But $700 for a condo compared to $1,000 for a home ain't what I consider "much lower."

There is no doubt pools are expensive for homeowners to heat and maintain. For argument's sake, let's say you plunked down $600 per month maintaining your pool. Do condominium pools cost more to maintain than similarly sized home pools? No, they do not.

Plus, everybody in the building pays into the HOA, meaning that $600 a month for ONE POOL is split between hundreds of people. Your monthly share for the pool should be about $3. The HOA is probably charging you $150.

Third, each condo does not have an individual yard like a house does, so the primary landscaping costs for a building are minimal. Even if groundskeeping cost $2,000 per month for the entire building, again, that's split between several hundred people. Your share is about $10 a month. The HOA is probably charging you $350.

I agree with you that condo utilities are "very minimal," but your argument is that utilities are an additional cost in a home, but are "taken care of" in a condo. If all utilities were, in fact, included in the HOA, I might buy your premise. But they are not.

Some of the nicer places do include WiFi Internet now. But WiFi costs $30 a month--how much is your HOA charging? $80? My point is, I'm not quite sure how paying utilities--regardless of how minimal--ON TOP of exorbitant HOA fees is a good deal.

Here's a little perspective: Assuming 200 people live in a building, and the average HOA payment is $800 (the range at West Ocean Two is $700-$900), that's $160,000 per month, or $1,920,000 per year.

You're telling me with a straight face that it costs 1.92 million per year to heat a pool, mow the lawn, and wax the lobby floors? Really? Nobody's getting fleeced here?

I mean, if $800 per tenant was the bare minimum West Ocean Two needed to keep the place running, then how do buildings with older construction (ostensibly requiring more repairs) do it on a paltry $300 a month?

Because that's all it costs.

You see, maintenance costs should be significantly cheaper in a high density building than a home. I mean, that's part of the allure of condo living: avoiding the high costs and hassles associated with home maintenance. I get that, and I see why some believe HOA costs are worth it to live a low-maintenance, "lock-and-walk" lifestyle.

But slapping down $700-$900, considering you still have to pay utilities, share a pool with hundreds of people, and have no valet or maid service included, and still have to pay for any upgrades, is hardly avoiding the high costs and hassles associated with home maintenance.

Frankly, I think people pay the $700 to $900 a month at West Ocean Two to feel cool. Plain and simple. I mean isn't coolness what consumerism is all about?

People buy Porsches and brag to their friends that an oil change set them back $325. Overpaying for something so rudimentary has become a sort of status symbol, a way to feel cool when coolness for the little people is just a credit card swipe away. These chronic overpayers feel cool to have such expensive (albeit foolish) tastes, and feel even cooler when they can criticize others for not having had the pleasure of such fine things.

You know, kind of like someone posting a comment about their house being so nice it set them back $1,500 a month just to keep the lights on.