When consulting about purchasing a condo in Ann Arbor, it's not uncommon to hear about the tenant approval process for the first time just as the contract is nearing completion. If you're planning to buy a condo for rental income, it's essential to check how the management association screens tenants and what limitations they impose on rental units before signing the contract. I've seen several cases where buyers skipped this step and later discovered that the building was restricted from renting when they were trying to find tenants.

Looking at the recent market, the condo prices in Ann Arbor vary significantly by area. The median listing price for condos in Central Ann Arbor is around $575,000, while the overall median price for homes in Ann Arbor is $417,650, which has increased by 8.48% compared to a year ago (Redfin, as of July 2026). It's important to note that this figure includes all listings, not just condos. Given the city's proximity to the University of Michigan, there is a steady demand for tenants among students and young professionals, which supports the rental demand for condos.

The monthly HOA fees for Ann Arbor condos typically range from $200 to $500 (Redfin local data, as of 2026). The reason condo management fees are higher than those for single-family homes is that the management association is responsible for maintaining the building's structural elements, such as the exterior walls and roof. Under Michigan's Condominium Act (MCL 559.205), management associations are required to maintain a reserve fund for major common area repairs and must set aside at least 10% of the annual budget in a non-cumulative manner. To verify whether this standard is being met, one must review the management association's financial statements directly.

This brings us to the tenant screening aspect. Fannie Mae revised its condo loan guidelines in 2026, raising the reserve requirement for a condo to be recognized as warrantable from 10% to 15% of the budget. If reserves are insufficient, the percentage of units with unpaid dues exceeds 15%, or the rental unit ratio is excessively high, the building may be classified as non-warrantable, leading to significantly higher loan rates or even making loans difficult to obtain. This means that buildings with a high number of investors buying condos for rental purposes may paradoxically raise the loan threshold for the next buyer.

The price difference between new and older condos is also worth noting. Recently built condos may have higher listing prices but often have thin reserves, while older condos may have lower listing prices but face risks of special assessments due to upcoming plumbing and exterior wall replacements. It's safer to check both the age of the building and its recent major repair history rather than making judgments based solely on listing prices. Rising insurance premiums are another factor to consider. In recent years, condo insurance rates have been increasing nationwide due to rising reinsurance costs and litigation risks (iii.org), which can lead to higher management fees or special assessments. Asking the management association how much the insurance premiums have increased during their recent renewal is a practical way to verify this information.

• Check the management association's rental restrictions and tenant approval process
• Review the financial statements and reserve accumulation status from the last 2-3 years
• Check the percentage of units with unpaid dues and the rental unit ratio
• Look for any history of lawsuits or special assessments in the management association's meeting minutes

If you're moving to Ann Arbor from another state, it's also important to note that the property tax calculation method may differ from your previous residence. In Michigan, the millage rate varies by county, so even condos in the same price range may have different actual tax burdens. Families considering school districts tend to prefer single-family homes over condos, which aligns with the fact that the tenant demographic for condos is primarily composed of students and professionals. This tenant composition can lead to management burdens due to frequent turnover. School district boundaries change often, so it's advisable to check the assigned school for the specific address before purchasing.

Ultimately, if you're considering investing in Ann Arbor condos, it's safer to first examine the financial health of the management association and the rental regulations rather than just the listing price. This article is intended to provide general information, and actual investment decisions and contract terms should be made in consultation with a real estate professional.