Ask these seven questions before buying your Fresno condo
I have written about Fresno condo real estate investing before and that’s because Fresno real estate buyers are seeking them out. I have had more Fresno real estate buyers ask about Fresno condos in the past 12 months than ever before.
Part of the allure to Fresno condo living is the lock-and-leave lifestyle that a condo can bring.
However, just because you buy a Fresno condo, doesn’t mean everything about the procedure is responsibility free.
SEVEN QUESTIONS TO ASK
Here are seven questions every Fresno condo real estate buyer should ask before placing an offer. They are designed to get you thinking about issues that you might not have thought of and could make your buying decision a little easier.
1) Is the complex or building renter-friendly?
As a rule-of-thumb, if the renter-occupied population is over 10 percent in the building or in the complex, there should be clear policies outlined in the bylaws. Are you responsible for finding future renters or does that responsibility fall on the property management company?
It would also be a good idea to have a real estate attorney look over the association’s rental lease agreement. This will help you to understand the specifics that you will be required to adhere to when renting your condo in the future.
2) Who manages the property?
If there is no professional property management company in place, it’s likely that the owners are trying to self-manage the building or complex. This might not be the most efficient or effect manner of property management. Some condo owners may not even live in Fresno, so self-management from a long distance away can lead to trouble.
Ask the owners of their opinion of the property management company and they job they are doing. For the most, is the property management company doing a good job?
3) Are there past legal problems?
There can be more legal involvement with buying a condo than in buying a single family home. For this reason, have a Fresno real estate attorney look at any past legal problems associated with the building or complex and the Association. A legal review of the bylaws will be worth the money spent. Your attorney can screen the Association at the local courthouse for any past law suits or legal problems.
4) What are the past complaints?
Request a copy of the most recent Association board meeting minutes. Here is where you find problems that owners have expressed concern over. Owner complaints can add up and tip you off to serious management issues.
Reading the minutes from past board meetings will also give you a better understand of the day-today projects that are in motion. It will help you to learn about the complex.
5) Are there delinquencies?
Ask about HOA delinquency rates. If owners aren’t paying the HOA fees this will affect how the Association can manage the property financially. You don’t want to buy into an under-funded Association. This can be a problem within the past few years as Fresno has experienced high unemployment and a decrease in family income levels.
6) Are you properly insured?
The Association has an insurance policy that you need to investigate. If something major should happen to the building or complex, is the replacement insurance policy enough to rebuild in today’s dollars? There should also be a rider on the policy for bringing the replacement building up to code to today’s building requirements.
Be sure to pay for your own insurance coverage in case there are holes in the Association’s coverage. A licensed insurance agent can help to explain the coverage and terms.
7) How strong is the repair account?
Request information on the Association’s repair fund. The repair fund is the pool of money that will be used for future repairs to roofs, sidewalks, swimming pools, tennis courts, clubhouses, etc.). The older the building, the stronger or larger the repair fund should be.
Buying a condo as an investment property can be financially smart, but it does come with more questions and investigative work when compared with single family buildings. Ask the right question upfront and you can avoid buying into a troubled Association.
Joseph Hollak is a Fresno Realtor that has helped investors buy Fresno condos. Joseph is currently with Keller Williams Realty Fresno and can be reached at (559) 320-0690.
