The Truth about HOA Fees in Delaware 55+ Communities

If you're looking at 55 plus communities in Delaware and you have seen HOA fees from $150 a month to over $500 a month, this video is for you. Today, I am breaking down the real truth behind the HOA fees in Delaware's 55 plus communities, what they cover, what they don't cover, and the mistakes that I see buyers make after they move in. Because HOA fees aren't automatically bad, but if you misunderstand them, they can absolutely blow up your retirement budget. This video is for you if you are 55 or older or maybe you're 53 or 54 and you're just playing around with the idea of a 55 plus community. Maybe you are already retired or about to retire and you're wondering where would be the best place to retire to. Delaware is often looked at as the best place to retire because of our low property taxes, our lower cost of living, and our lower cost of housing. I just had this conversation not too long ago with potential clients that were looking in 55 plus communities and they were not sure about the HOA fees. One community it was $320 a month, another community it was $525 a quarter, and both of those communities, while similar, have drastic differences in what they offer, whether they're an amenities rich community, if they have an indoor pool, an outdoor pool, and we're going to break all of that down today. If you've heard things like HOA fees are a scam or Delaware HOAs are cheap, both of those statements could be wrong and let me break down why. Let's start off with the basics. In most 55 plus communities in Delaware, the HOA fee covers things like grass cutting and landscaping, snow removal, trash and recycling, access to the clubhouse, whether you have pools, fitness centers, or pickleball courts, walking trails, and common areas, and sometimes on rare occasions it could even cover internet and cable. Very rare. But here's the key point that many miss. Two communities could have the same HOA fee and have a completely different value. So a $250 HOA fee could be a great deal for one community and it could be absolutely overpriced for another. So why are HOA fees so wildly spread out in Delaware? The number one reason being the community's age and what I mean by that is that older communities that are established that have a lot of resale homes, they are often lower fees as opposed to the newer construction, newer communities, they have higher fees with fewer surprise fees because the community is new. Oftentimes they have already priced in things like a reassessment or the paving that needs to be done or any of the common areas. So that's why I say that you have fewer surprises with the newer communities. Number two would be the amenities density of the community. Places like Heritage Shores and Nobles Pond are very amenities rich. They have indoor pools, they have outdoor pools, they have pickleball courts, they have tennis courts, they have fitness centers. So the more amenities, the higher the fees. As opposed to a community that maybe just has a clubhouse with a fitness center and a lounge. Those typically have lower HOA fees. Number three, what is privately owned versus shared? Some communities own the roadways, the lighting, and the stormwater management. Others push those costs to the county. And that difference right there matters long term. Like I just talked about, maybe you're going to have to have a reassessment for the roadways or the common areas that all the street lights have all gone out. Things that need to be kept up on may cost you more in the long run than those communities that push it to the county. Number four is the management style. In some cases, you will have an HOA that is owned by a management company, in which case normally the fees are higher. In other communities, you have an HOA board that is owned by the homeowners of the community. While the fees are less, the risk is actually higher in those communities. And if you're wondering why the risk is higher in those communities, it is because oftentimes with management companies, they know exactly how to run a community. When the homeowners take over, a lot of times they don't want to step on another neighbor's foot, they don't want to get into a disagreement because it's their neighbor, the funds are not managed correctly, maybe they didn't pre-plan for the roadways needing to be paved, maybe they didn't pre-plan for them wanting some kind of amenities, whether they wanted to put a clubhouse in, or they wanted to put a pool in, or the landscaping company that they've hired is wildly overpriced. I mean, there's so many different things that go into it. So that's why I say it is riskier to have a homeowners association that is owned by the homeowners, even though it is less expensive than if you were to use a management company. All right. So one of the number one biggest myths that I hear is that lower HOA fees are always better. That is not true. It is so not true. And the reason I say that is because oftentimes if you have a lower HOA fee, your maintenance is deferred, you have underfunded reserves, which means that if something were to happen and it was to cost the community thousands and thousands of dollars, if you don't have those reserves already in the fund, you're then going to have to ask your community to fix that. Whether that be that you're asking for it could be thousands of dollars upfront for something that needs to be fixed in the clubhouse, or maybe the road has started to fall in if you own the roadways. I mean, there's so many different things. And also you could have special assessments down the line because of that. So while yes, it is always nice to have lower HOA fees, it is not always the best route. That is the biggest myth that I hear is not always the best route. And that's why I say that. I have buyers all the time. They're so excited that they have a low HOA fee, but then they call me a few years later and they're very upset that they have a $5,000 special assessment. And it's because there wasn't enough money in the reserves or they didn't pre-plan for things that needed to be done. So this is why I say it's the biggest myth. Do not always rely on the fact that just because your HOA fee is low, that it's the best thing ever. Here are typical things that HOA fees do not cover. And this part is absolutely critical. HOA fees do not cover property taxes, homeowner's insurance, interior maintenance, and utilities, unless it is absolutely specified in the HOA documents that they cover things like the internet or the cable, or they cover things like the exterior of the home. This is one of the biggest planning gaps that I see. A lot of times it is assumed, especially in town homes and carriage style homes, that the exterior of your home is included in the HOA. So any repairs, whether it be like your siding gets cracked, or the trim around your front door gets cracked, or any kind of maintenance you would need, in most cases, the exterior of your home is not included in the HOA fee. So just keep that in mind. If you are looking at a town home or a carriage style home, in most cases, it is not covered. Also, you are going to have to pay your property taxes. You are going to have to pay your homeowner's insurance, and your utilities, in most cases, is not included in your HOA fee. Now, here is some good news. In most cases, Delaware's 55 plus communities, the HOA fee is absolutely lower than our surrounding states. And then you can also factor in the fact that we have no state sales tax. We have lower property taxes. And we also have more efficient community layouts. This is something that has come up multiple times when I have looked at other 55 plus communities outside of Delaware. The community layouts are not always the best. What you're really looking for is that the clubhouse is centrally located, so that it's very easy to get to the clubhouse no matter where you live in the community. There's multiple entrances, especially if you live in a bigger community, and that they're sidewalks. Because what I have found is that most 55 plus clients want to be able to just walk around their neighborhood, or sit out on their front porch. They're looking for a neighborly feel. And all of this to say that maybe some of this doesn't matter to you, but in most cases, clients are looking for those types of things. So if you are thinking about where to retire to, this is oftentimes why people are choosing Delaware. Now, you still have to compare community to community. So I'm not saying every community is the same. But when you're looking state to state, Delaware is heads and toes above the surrounding states. So how do you actually compare the communities? You are in luck because I have done all of the hard work for you. I have a chart that breaks down every 55 plus community here in Delaware. It tells you what the HOA fee is, what it covers, what types of homes are in that community, what the price point is in that community, where it's located in Delaware, and the proximity to medical. Because that is another thing that is very important to retirees, is how quickly can I get to a hospital? How quickly can I get to a specialist? So instead of you looking at listing photos and trying to figure that out, I took all of the guesswork out for you. And there is a link down below in the description that breaks down the entire state of Delaware and all of our 55 plus communities. So you can compare it for yourself. Also, if you found this video helpful, and you would love to sign up for my weekly newsletter that is down below in the description as well. Every week, I break down things like what are Delaware's retirement costs? What are the communities looking like? And the mistakes that I see buyers make before they move. So HOA fees are not good or bad by default. Honestly, they're a tool. The problem really isn't the fee, it's knowing what you're paying for. Are you paying for an amenities rich community? Are you paying for landscaping? Do you own the roads? Are you paying for a management company? Each community is different, and this is why I say it's so important to know what your HOA fee covers before moving into the community. If you want help comparing the communities, and if Delaware is the right place for you to retire to, I would absolutely love the opportunity to help you. And my information is down below in the description. There is a link to my calendar where we can get set up with a Zoom meeting or a phone call. Once again, I really hope that this video helped. If it did, be sure to give me a thumbs up, be sure to subscribe to the channel, and I will see you on the next one. Hey, I'm really glad that you made it this far in the video. If you're interested in more videos like this, please check out this video right here. And if you would love to tour Delaware communities with me, check out this playlist right here. And don't forget, subscribe to my channel.