How Much Money Is in Your HOA’s Reserve Fund?

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As we’ve discussed before, Homeowners Associations come with many pros and cons. Before you decide to purchase a property within an HOA, you need to review the financial documents during your contingency period.

You want to make sure you are moving into a community that is financially secure. Obviously, there’s an HOA fee due. Whether that fee is $50 or $350, you need to know what that money is going toward. What are you getting for that fee? The HOA fee covers amenities such as parks, pools, and landscaping, but a portion of that money goes to the reserve fund.

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Pay attention to the reserve fund.

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As time goes on, fences, roofs, and landscaping may need extra repairs. The reserve fund is there for any major repairs. Every year, the HOA conducts a reserve fund study. Look at those studies to see how the reserve fund is doing so you know what is going on in the community in the long run.

If your reserve fund is 50% funded, 100% funded, or 150% funded, you’re in pretty good shape. If the reserve fund is only at 35%, that is a red flag. The HOA may even need to order a special assessment and, depending on the number of homes in the community, that could run a few thousand dollars. They may even plan to raise the dues, so definitely pay attention to the reserve fund and special assessments.

If you have any questions, give us a call or send us an email. We would be happy to help you!

Is Solar Energy a Good Investment in the Silicon Valley?

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Sellers often ask me, “Is solar a good investment for my home?” To understand the different options for solar energy out there, it’s important to rank the options from worst to best. Based on my professional opinion and experience as a local agent, I’ve ranked some options for you today from worst to best.

• Solar lease: Although this was the most popular when solar came out, it’s now become the least favorable. Particularly, if a prospective buyer isn’t interested in solar, they might ask you to pay that lease off. It can be expensive if you’ve leased it for fifteen to twenty years.
• Financing solar with a principal and interest payment: If a buyer asks you to pay this off, you’re only paying off the principal balance without penalty.
• The Power Purchase Agreement: This is currently the most popular out of all options. For the most part, a solar company -- your new electric company -- will install solar for free into your home. They’ll also maintain and monitor the system without money out of pocket. You sign a twenty-year deal with this company typically, but there’s no extra cost and this reduces your electric bills.
• Buying solar outright: This is the best option if you have or borrow the money. You essentially eliminate your electric bill when you do this. This is attractive to buyers because that’s hundreds of dollars they save each month.

When you invest in solar, you add value to your home! If you have any questions about solar, please give me a call today.