I once heard a story about a condo owner in Riverside who received a special assessment notice in their mailbox about a year after purchasing their unit. They had only been thinking about the monthly HOA fees, and suddenly they were hit with a large unexpected bill. This situation is not uncommon in today's condo market. The first thought that comes to mind is whether it would have been better to buy a single-family home instead. However, if they had followed the proper steps, they could have been aware of many of these issues in advance.

Currently, there are 61 condos for sale in Riverside, with a median sale price of around $397,000. At the same time, the median price for all homes in Riverside is $699,000, making condos a much more affordable entry point. The median HOA fee is $439 per month, and it's important to note that properties with an HOA typically cost an additional $200 to $400 per month compared to those without one, which adds to the overall financial burden.

A simple way to avoid the shock of unexpected fees is to request the reserve study results before making an offer. Properties with a well-funded reserve fund are less likely to face special assessments, while those with insufficient reserves are more likely to receive large bills in the future. Be sure to check the financial statements and budgets from the past two to three years, any planned special assessments, and whether there are any lawsuits noted in the minutes of the homeowners association meetings.

The building structure is another aspect that can be easily overlooked. Under California SB 326, condos managed by an HOA must undergo inspections of external structures, such as balconies, every nine years, with the first inspection deadline for condos having already passed on January 1, 2026. If the inspection reveals that repairs are needed, the costs could lead to special assessments. It's advisable to ask about the inspection history when viewing properties.

It's also important to consider the eligibility for loans. If the percentage of delinquent units exceeds 15% or if the reserve fund is less than 10% of the budget, the property may be classified as a non-warrantable condo under Fannie Mae guidelines, which could result in higher interest rates for loans. This classification affects not only the current sale but also the loan conditions for future buyers when reselling.

Returning to the earlier example of the special assessment, the owner missed the opportunity to request the financial statements from the HOA when they viewed the property. If they had reviewed the reserve study, they would have discovered the low reserve rate and anticipated the possibility of special assessments. While it's tempting to rush through the paperwork when you find a property you like, skipping this step can lead to significant expenses down the line.

From an investment perspective, Riverside is a market where logistics and university demand intersect, making rental demand relatively stable. However, if you don't check the risks associated with HOA fees and special assessments in advance, your calculations for return on investment could be significantly off. If you plan to rent out the property, it's also wise to check the rental restrictions to ensure you don't violate the minimum rental period or maximum number of rental units set by the community. These documents will also be needed during the loan approval process, so having them organized in advance can make the closing process much smoother. By summarizing the HOA fees, insurance costs, and potential special assessments, you may find that the initial numbers you saw differ significantly from the actual net income. Knowing this difference beforehand can change your investment decision. If you're considering school districts, refer to GreatSchools ratings, but be sure to verify the assigned schools before purchasing. This article is not investment or legal advice, and it's recommended to consult with a professional before finalizing any contracts.