When investing in a condo the HOA dues are a major consideration for buyers. They affect the monthly payment, thus some buyers will not qualify for a loan on a condo with higher than average HOA dues. Even many cash buyers still look at high HOA dues as a negative. But are they?
Take a look at the Reserve Study – Washington State law requires condominium associations to complete a reserve study every three years (and update annually). In brief, it is an assessment of all components of the condo building and when repairs/replacements will be expected and if the HOA reserves are sufficient for the future work. It is a very comprehensive study.
Most condominium buildings in Seattle are underfunded. This means that when the building finds that moisture has destroyed the siding (common) or another unpleasant surprise presents itself, then the only way to pay for this is a special assessment. (Special assessments happen when the association is short of funds for a project and unit owners have to cough up extra funds to complete the work).
Yes, low HOA dues are a dream… just make sure it is not at the expense of a faltering HOA!
This has been top of mind to me because of my new listing in the 98 Union building downtown. We have nothing but great feedback from buyers – it has location and luxury – price is right-on for the area… but the high HOA dues seem to be a barrier for action.
The fact is that the building is in the top 20% of HOA reserves for the State of Washington, well funded indeed! The HOA knows the building and knows how to manage money.
It won’t be long until someone recognizes the real value of a well managed HOA – as well as the benefits of living a small boutique building, where everyone knows each other, in a sea of giant high-rises. Until then I will be there opening the doors for showings, enjoying the City views off the terraces and the delicacies of Pike Place Market below. Please let me know if you want a private tour of 98 Union Street, Suite 809.