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Comment by burger_moon | Hacker News Reader

Typically HOA fees don't exist in rentals where as in condos that's an extra fee you're paying every month in addition to your mortgage. The $400k condo is going to have a substantial HOA fee.

I only have knowledge of my local area, but for condos around the $200k price range here have HOA fees around $500/mo. That would put him right back at a wash for monthly price if they didn't put any down payment on the condo.

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Depending upon how well / poorly managed the HOA is, HOA fees for $200k condos can easily exceed $500 / mo. The condo I sold for a substantial loss in the Seattle area in 2010 at $175k had a $280 / mo HOA due for a pretty terrible set of amenities due to a lawsuit that was eating up all the funds. As the HOA dues go up, it can further suppress gains. Then comes some special assessments like new roofs. As such, I consider HOA dues not too dissimilar of a hit on an investment like expense ratios / management fees in a fund, except I've heard of few HOAs that could improve your property value the more money you paid in unlike something like a unicorn actively managed fund.

Great point! Just looked it up and the last information I could find showed just below $500 as the average HOA in Seattle. In theory based on the original guidelines you still end up ahead - but it's very close. I recently bought a SFH in Seattle and it ended up way in my favor over renting for things people choose not to include in the other direction (having to pay for parking, having to pay per pet, etc)

$500 a month to an organization that tells you all the things that you can't do with your own property? That is absurd.

I agree (which is why I live in a single-family), but to be fair, the HOA/condo fee also typically pays for things like the outside maintenance, snow removal, common area maintenance, roof, painting, landscaping, pool/tennis court/gym/what-have-you, trash removal, insurance and other expenses relating to the shared/public areas.

The value in that is that they also tell your neighbors what they can't do with their property.

For some condominiums (especially apartment-style, many-units-in-one-building condos), HOA fees often largely go to maintaining common areas and shared structure.

This is often less true with detached, single-family homes with HOAs.

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