Phoenix may not have the highest homeowners association fees in the country, but HOA costs affect an unusually large share of Valley property owners.
The median HOA or condo fee in metro Phoenix has reached $106 per month, and 54% of local homeowners pay association fees. Among 45 major metros studied, only Orlando, Houston, and Miami had a higher share of owners paying them.
For Arizona rental property investors, the important number is not simply $106. It is the total effect that recurring dues, future increases, special assessments, and association rules can have on cash flow and resale value.
Phoenix HOA Fees by the Numbers
At the current median, an owner pays:
- $1,272 per year
- $12,720 over 10 years if the fee never increases
- About $14,582 over 10 years if the fee rises 3% annually
The original report also estimated that a $100 monthly fee could translate to roughly $20,000 in reduced purchasing power or long-term equity when capitalized at 6%. Using Phoenix’s $106 median produces a similar estimate of about $21,200.
That is not a guaranteed dollar-for-dollar reduction in a home’s appraisal. It is a useful illustration of how buyers and lenders price a permanent monthly obligation.
Phoenix ranked only 24th among the 45 metros for the size of its median fee, but its high rate of HOA participation makes the trend especially important locally.
HOA Costs Are Becoming Harder to Avoid
Association living is becoming a larger part of the housing market, especially in fast-growing states with substantial new construction.
Arizona now has an estimated:
- 10,300 community associations
- 911,000 homes in associations
- 2.28 million residents living in association communities
Nationally, 66% of homes completed and 81% of homes sold in 2025 were in a community association. For investors targeting newer Valley subdivisions, eliminating HOA properties from a search can significantly reduce the available inventory.
The better question is not always, “Does this property have an HOA?” It is, “Does this association provide enough value and financial stability to justify its cost?”
Why HOA Fees Are Rising
Association budgets face many of the same pressures as rental property owners:
- Higher insurance premiums
- More expensive landscaping and maintenance contracts
- Rising labor and material costs
- Aging roads, roofs, pools, gates, and other shared infrastructure
- Greater reserve-funding needs
Nationally, 82% of surveyed homeowners who pay HOA fees said their dues had increased during the prior three years. The national median rose from $108 per month in 2019 to $135 in 2025. Median condo dues reached $420 per month, reflecting the larger insurance and structural obligations that many condominium associations carry.
For investors, a fee increase can arrive at the same time as higher taxes, insurance, repairs, and financing costs. That matters in a market where renters remain price-sensitive, as shown in our latest Phoenix real estate and rental market update.
What the Headline Number Does Not Show
HOA dues affect financing
Mortgage underwriting generally includes association dues and special assessments in the property’s monthly housing expense. That can reduce the amount a buyer qualifies to borrow and may narrow the future buyer pool when an investor is ready to sell.
Low dues can hide a larger risk
A low monthly payment is not automatically a sign of a well-run association. An HOA that chronically underfunds reserves may eventually need a sharp dues increase or a special assessment when major work can no longer be postponed.
Arizona resale disclosures can include the association’s current budget, annual financial report, reserve balance, most recent reserve study if one exists, and pending litigation. Investors should review those documents as carefully as the property inspection.
Tax treatment depends on what the payment funds
For rented condominiums, maintenance-related dues and assessments are generally deductible rental expenses. A special assessment used for a capital improvement is generally not immediately deductible, although the investor may be able to recover the cost through depreciation. Confirm the treatment of a specific charge with a tax professional.
A planned-community HOA is not the same as a condo association
Arizona law treats the two differently.
- In a planned community, a regular assessment generally cannot increase by more than 20% over the prior fiscal year without approval from a majority of members, unless the governing documents impose a lower limit.
- A planned-community association may pursue foreclosure of an assessment lien when the owner remains delinquent for 18 months or owes at least $10,000, whichever occurs first.
- A condominium association may reach that stage after one year or $1,200, whichever occurs first.
Both types of associations must make reasonable efforts to communicate with the owner and offer a reasonable payment plan before filing a foreclosure action. Investors can read more in our overview of Arizona’s HOA foreclosure law and SB 1494.
How Arizona Investors Should Underwrite an HOA Property
Before buying, do more than confirm the current monthly fee.
- Review several years of dues and meeting minutes. Look for a pattern of increases, deferred projects, owner disputes, or repeated emergency repairs.
- Study the reserve position. Compare the reserve study with the actual cash on hand and upcoming capital projects.
- Check for special assessments. Ask about approved assessments, projects under discussion, and loans taken out by the association.
- Read the rental rules. Verify leasing caps, minimum lease terms, tenant-registration requirements, fees, parking rules, and any pending rule changes.
- Model future increases. Stress-test the deal with 3% to 5% annual HOA inflation and a possible one-time assessment.
- Identify what the dues replace. Landscaping, water, trash, roof work, exterior maintenance, or insurance may offset expenses the owner would otherwise pay directly.
- Build the fee into the complete ownership cost. Our guide to the 5% rule in real estate investing offers a useful framework for comparing the cost of owning with alternative housing or investment choices.
The Bottom Line
A $106 monthly HOA fee will not ruin a well-underwritten Phoenix rental. The risk is treating that number as fixed, or ignoring the association’s reserves, rules, and future obligations.
In a market where insurance, taxes, repairs, and other operating costs are already rising, investors should evaluate an HOA as part of the property’s financial condition. A well-funded association that protects common areas and neighborhood standards can support long-term value. An underfunded or overly restrictive association can reduce cash flow, create surprise expenses, and complicate leasing or resale.
The winning approach is simple: underwrite the association as carefully as the house.