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The other day, I walked us through how a $440-450k Erie townhome can easily hang with a $2,500-$2,800 rental once you use real rates, real incentives, and real math instead of Instagram fantasies.
Today is about the mistake first time buyers make after they finally decide to stop renting: they ignore the structure of the deal.
Most first-time buyers focus on three things:
“What can I qualify for?”
“What’s my monthly?”
“Is this my only way into Boulder/Denver?”
So they do what feels responsible: grab the “cheaper” condo or townhome and treat the HOA like a throwaway line on the listing.
That’s the mistake. Not the buying of an equity producing townhome. But deluding themselves into believing the HOA is neutral and actually provides utility.
Let’s talk about what that actually means in the real world.
Say the HOA is $450-$650 a month. Totally normal around here right now.
Call it $600 to make the math rude. That’s $7,200 a year.
Over a 7 year first home hold (roughly how long people keep their first place),
that’s about $50,000 that never touches your principal or your net worth.
It’s not evil. It’s just not equity.
I’m reminded of Paulie getting paid in Goodfellas:
https://youtu.be/8L4HHPTiZN8?si=uFf4ADlY1n8asd8r
Meanwhile, buyers will scroll right past a small house or duplex a little farther out with no HOA because the sticker price looks scarier.
But once you zoom out, the “cheaper” place with the fat HOA can end up burning just as much (or more) each month, and a big chunk of that burn is permanent.
Snow removal? How many times a year? Building maintenance, have you seen the maintenance on these buildings?
Capital Reserves? BAHAHA. I tell you what, go ask an HOA official about what your capital reserves are going to, and what they earn YOU.
That’s before we even get to volatility.
HOA fees can jump 20-25% when the master insurance renews, when a roof needs replacing, or when a board finally stops kicking the can down the road.
Special assessments are basically capital calls: surprise bills that show up years after closing because the numbers never penciled in the first place.
Here’s the part nobody tells first-time buyers:
Getting off the sidelines is step one.
Buying the right structure is step two.
Some HOAs are boring, stable, and worth every penny.
Some are one insurance renewal away from “we need another $8,000 from you by June.”
My job isn’t to yell “buy now.” I don’t do that.
My job is to help you not accidentally sign up for a second mortgage disguised as “dues.”
If you (or your kid / niece / nephew / friend) are looking at a condo or townhome anywhere along the Front Range, hit reply and send me the MLS link.
I’ll give you a blunt HOA gut check before you commit years of payments to something that doesn’t build what you actually care about: flexibility, equity, and options for the next move.
