When considering condo investments, in the past, comparing the sale price and location was often enough to make a judgment. Now, it's different. If you don't check the financial status of the association first, no matter how attractive the sale price is, it can turn into a significant burden later on.

The median sale price for condos in San Jose is $702,500 as of March 2026. The items to check can be broadly divided into three categories: the level of management fees, the status of reserve fund contributions, and the availability of loans. While these three can seem separate, they are actually interconnected. If management fees are not collected at an appropriate level, reserves will be insufficient, and if reserves are lacking, it can negatively impact loan assessments.

The first is management fees. According to data collected in March 2026, San Jose is noted as one of the metros with a high percentage of households paying over $500 in monthly management fees. The national average management fee is $310 per month as of 2026, which has increased by 24% from $250 over the past six years. San Jose clearly exceeds this national average. While it's impossible to stop the rate at which management fees rise, you can directly check in the budget how those fees are allocated and how much is set aside for reserves. In the past, many would prioritize choosing complexes with lower management fees, but now, complexes with low fees may also have weak reserve funds, making simple comparisons difficult.

The second is the financial health of the association board. In the past, it was not a major concern if the reserve fund was only filled to 10% of the budget. Now, it's different. Starting from applications after January 2027, Fannie Mae will raise the reserve contribution requirement from 10% to 15% of the budget. Complexes that do not meet this standard often have to make up the shortfall through increased management fees or special assessments. It's advisable to request and directly check the association's financial statements, budgets, and reserve study results from the past two to three years.

The third is the availability of loans. If the percentage of delinquent units exceeds 15%, or if the proportion of rental units is excessively high, or if the reserve fund is less than 10% of the budget, or if there are ongoing lawsuits, the condo may be classified as non-warrantable. Starting August 3, 2026, Fannie Mae will eliminate the streamlined review previously applied to existing condo complexes and switch to a detailed review process. This method examines the delinquency rate, rental unit proportion, and litigation history, meaning that if there are ongoing lawsuits, loans may be denied. Additionally, California SB326 must also be considered. Buildings with three or more units must have their external structures, such as balconies, inspected by January 2025, and this will repeat every nine years. If the inspection results are not reflected in the reserve study, it is legally considered incomplete. If the property is for rental purposes, regulations such as rent caps or minimum rental periods should also be checked. In order, the four items that must be requested from the association before a sales contract are management fees, reserve funds, loan availability, and rental restriction regulations.

If you are a family moving to San Jose from another state, it's also good to know that the property tax calculation method is different. California uses Proposition 13, which reassesses property taxes based on the purchase price and limits annual increases to 2%. If you are coming from a state with no income tax, this structure may feel unfamiliar. In the past, condo association rules were often overlooked, but now the reserve study and financial disclosure obligations under the Davis-Stirling Act have become much more stringent than before.

San Jose has stable employment in the tech industry, so rental demand is relatively stable, and the entry price is lower compared to single-family homes, making it accessible for first-time investors. However, since it is a region with higher management fees than the national average, it seems realistic to account for the possibility of management fee increases when calculating rental income. This article is not investment or legal advice, and it is safer to consult with a professional before entering into a contract.