A family moving from another state to Arizona recently requested advice on investing in condos. Having lived in California, they preferred a condo for easier management compared to a single-family home, with a budget around $250,000. The median price for condos in Phoenix is approximately $259,500, which is significantly lower than the median price of $458,000 for homes in Phoenix (Houzeo, Redfin, as of 2026). The lower entry barrier for condos makes them attractive for investment, but if buyers only consider the purchase price, they may encounter unexpected costs later due to the management situation.

The first thing this family checked was the financial status of the homeowners association (HOA). The average HOA fee in the Phoenix area is about $674 per month (HOA Costs, as of 2026), but this figure includes single-family home communities, while condos or townhomes typically range from $200 to $600 per month (Brescia Real Estate AZ). The overall average in Arizona is $192 per month, which is relatively low compared to other areas, but complexes with amenities like golf courses or swimming pools can have much higher fees, so it's essential to check each complex individually.

One point that families moving from other states might overlook is that Florida enacted the SB 4-D law after the Surfside condo collapse in 2021, mandating structural inspections and full reserve fund contributions for buildings over three stories. California also requires inspections of exposed structures like balconies every nine years under the SB 326 law enacted in 2019, with results reflected in reserve studies. However, Arizona currently has no state law mandating reserve studies or minimum reserve fund contributions for HOAs or condo associations (Solume, as of 2026). This means that unless the HOA voluntarily conducts a reserve study, buyers must request and verify financial statements and reserve balances themselves, or they may face sudden costs due to building deterioration reflected in increased fees or special assessments.

In fact, this family reviewed the financial statements, budgets, and meeting minutes from the past 2-3 years for the complexes they were interested in. If the reserve fund is less than 10% of the budget, the percentage of delinquent units exceeds 15%, or the proportion of rental (investor-owned) units is excessively high, the property may be classified as a non-warrantable condo according to Fannie Mae or Freddie Mac standards, making conventional loans difficult and only higher-interest loans available (Fannie Mae, Freddie Mac Selling Guide). Such properties may also have a limited pool of buyers when reselling, which is particularly important from an investment perspective.

Rental regulations are another aspect to consider. In Arizona, for an HOA to restrict short-term rentals, it must be specified in the CC&R, and adding new restrictions generally requires unanimous consent from all owners. A recent case (Kalway v. Calabria Ranch HOA) has set a precedent against imposing unexpected new obligations after purchase, thus relatively protecting existing owners' rental rights. However, it is crucial to directly verify the CC&R of each individual complex.

In a market like Phoenix, where there is a significant price difference between condos and single-family homes, it can be easy to calculate returns based solely on the initial purchase price. However, to accurately assess actual investment returns, one must also consider management fees, reserve fund status, history of special assessments, and loan availability. If school districts are important to the family, they should also refer to ratings from GreatSchools or Niche, but since school district boundaries change frequently, it is advisable to verify the assigned school for the specific address before purchasing. This article does not constitute investment or legal advice, and it is recommended to consult with real estate professionals, accountants, and, if necessary, attorneys before proceeding with any contracts.