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How Does an HOA Increase Property Values?

Manicured lawn with a gazebo and townhomes

As a resident living in a community with a homeowners’ association (HOA), you enjoy countless perks, like convenient amenities, a tight-knit community, and a beautifully maintained neighborhood. However, the biggest benefit to living in an HOA might be the enhanced property values. When property values increase, you get more from your investment, including higher resale prices and greater home equity.

Whether you’re looking to sell your home or are interested in learning more about your rising home equity, read on to discover how your HOA can affect—and increase—home values in your neighborhood.

How Much Impact Does an HOA Have on Home Property Values?

While several factors affect a home’s worth, the condition of surrounding properties in the community can make a big impact. By maintaining standards and resident satisfaction, a community’s board of directors can positively influence property values. In fact, the Community Associations Institute (CAI) shares that HOAs that focus on preserving the neighborhood and enhancing efficiencies can protect and increase property values by as much as 2% to 17%.

Interestingly, data also shows that managed communities have a spillover effect on the value of homes just outside of the association. A recent study noted that homes within two miles of an HOA sell at an 8.5% premium compared to other non-HOA properties.

5 Ways an HOA Can Increase Property Values

With such a significant impact on property values by address, it’s important for HOA boards to prioritize efforts that help maximize home prices. Here are five areas of focus that improve home values in a community.

1. Maintenance & Landscaping

The most desirable homes are well-maintained and aesthetically pleasing to potential buyers. However, the appearance of the neighborhood and nearby homes will also play a role in the property’s perceived worth. Found in the governing documents, HOAs typically have covenants, conditions, and restrictions (CC&Rs) that require homeowners to keep up with home maintenance, which may include:

  • Limiting how tall your lawn can grow
  • Keeping garden areas free of weeds or overgrown plants
  • Trimming trees and bushes
  • Removing litter, clutter, and dead vegetation from yards
  • Keeping driveways clear and in good shape
  • Repairing exterior or visible damage to the home

In addition, HOA members pay dues to maintain community buildings and grounds, including landscaping in parks, walking paths, and other shared areas. With general maintenance being one of the top priorities for a board of directors, it’s their job to hire trusted vendors, manage reserve funds, and maintain proper upkeep of the community. That allows homeowners to enjoy an association that looks and functions at its best without added worry or cost.

An annual maintenance plan ensures your community is in top shape throughout the year. Read “Keys to Creating a Comprehensive Community Maintenance Plan” to learn tips for building one of your own.

2. Architectural Standards

Most HOAs have an architectural style that establishes visual harmony across the neighborhood. The most sought-after communities often have different floor plans with a similar exterior style, creating a cohesiveness that real estate buyers appreciate.

Community associations also enforce exterior design regulations that help maintain uniformity. For example, homeowners may have restrictions on paint colors and landscaping materials they may use. To prevent unapproved modifications, most HOAs have an architectural review board. It’s the job of the architectural review board to prevent safety hazards and maintain aesthetics, as each property contributes to the community’s image and appeal.

3. Amenities & Services

The availability of amenities and services in the community increases HOA home property values. Residents contribute regular dues to the association, which helps to fund shared amenities, like:

  • Swimming pools
  • Fitness centers
  • Playgrounds
  • Clubhouses
  • Picnic or barbecue areas
  • Community parks or gardens
  • Outdoor recreation options

Your HOA may also host community events that bring neighbors together for a fun gathering or informative learning session. Plus, some associations offer on-site security and gated entry for residents. All these amenities and services can greatly enrich the residential living experience, making homes in your HOA more desirable.

Gray house with two-car garage and green landscaping

4. Rules & Regulations

Homebuyers want to live in places where they feel safe and know their neighbors care about the community. HOAs create and enforce rules and regulations to ensure that is the case. Your HOA may implement rules such as:

  • Noise complaint policies
  • Short-term guest restrictions
  • Home occupancy limits
  • Rules and guidelines for street parking
  • Pet limitations
  • Trash and recycling rules
  • Holiday decoration restrictions
  • Architectural controls

These rules preserve the neighborhood's aesthetic, protect lifestyle and safety factors, and stimulate home property values.

5. Community & Exclusivity

Potential homebuyers often seek neighborhoods that offer a sense of community and exclusivity. They want to connect with neighbors who share similar values and lifestyles in a friendly and welcoming environment.

HOA communities are ideal for building meaningful relationships with neighbors. They provide ample opportunities to volunteer and get involved with community operations. Residents can also engage with fellow homeowners during social events, meetings, or while utilizing community amenities. This connected lifestyle is a draw for homebuyers, which can further increase home property values in your HOA.

A Beginner’s Guide to HOAs

Purchasing a property in an HOA is a big decision. And while there are several benefits, like enhanced community living and protected home values, understanding how an association functions is important for your investment and quality of life. Download our FREE our ebook, “A Beginner’s Guide to HOAs,” to learn everything from HOA basics and terminology to who’s who in your community, and much more.