Twinsburg, OH · Member since 2014 · 36 posts · 8 votes
Hello everyone
I am in process of making an offer on a condo in modesto. Condo sets on good location and rent ready. Wondering if anyone have any experience in that area in terms of rent rate. I think i can get the condo around $95,000 and According to my research, 3/2 Re renting around $1300. I have to factor in HOA dues too along with other expenses. Am i close or off? Also any problems with finding quality tanents? Thank you for your input in advance
Investor · Milpitas, CA · Member since 2015 · 40 posts · 13 votes
9y
@Gurjeet Brar I have to tell you that condo in Modesto is not your best choice because I've rentals in Modesto and all the renters want to move to SFR. If you can find a 3/2 but ideal is 4/2 SFR in Modesto you can also cash flow. I would recommend you look in an A class area like zip code 95355 because that zip code has the best school system in the area and also it's the safest in Modesto. Good luck with your hunting.
Real Estate Agent · Modesto, CA · Member since 2012 · 49 posts · 16 votes
10y
Hello Gurjeet,
I think the $1300 figure for a 3/2 applies more to SFH and traditionally condos are a little less. Depending on the area of course. To find good tenants I use Craigslist to advertise the unit where I publish my rental criteria directly on the ad. Follow that up with screening the tenants very thoroughly by calling references and checking past rental history. Also, there is a service called my SmartMove through transunion where you can check credit and criminal history.
Hope this helps let me know if you need anything else.
Investor, Agent, CPA · West Sacramento, CA · Member since 2009 · 690 posts · 262 votes
10y
@Gurjeet Brar, some items to seriously consider and do due diligence on when thinking about a condo are:
1) what kind of HOA board and management does it have? do they understand what they are doing? are they easy to work with or are they policing all property owners and renters? (policing may be ok if they are actively cleaning up the property but it may be detrimental if restrictions are enacted that are unrealistic).
2) what is the financial health/condition of the HOA. This is HUGE - if the HOA has no reserves, you are probably looking at future special assessments that will kill your cashflow.
3) is the HOA investor friendly? some HOAs are very restrictive on who/how/if you can rent your unit.
4) reach out to the board of directors and management and talk to them about the above. It's better to talk to them before you buy than after. Tell them you are an investor and you plan to rent. They are very likely to be upfront and tell you about all the issues the HOA has (or does not have) and if they don't want another investor owner, they will tell you about it. It's better you find out now than after you buy.
5) obviously the HOA fee and its history - has it been increasing steadily in the past, have there been significant increases, etc. The past may give you some idea about the future.
6) does the HOA own the building AND the land or is the there a land lease? Land leases may not be a common in CA as elsewhere but they can be a deal killer because they lease usually has periodic increases and is embedded into the HOA fee, hence continually increasing the HOA fee.
The biggest takeaway is that a condo requires much more due diligence because there are a lot of factors that you don't control. That doesn't mean it can't be a good deal, it can, there is just also a lot of potential for it being a bad deal so you have to make sure you do your homework.
Investor · Milpitas, CA · Member since 2015 · 40 posts · 13 votes
9y
@Gurjeet Brar I have to tell you that condo in Modesto is not your best choice because I've rentals in Modesto and all the renters want to move to SFR. If you can find a 3/2 but ideal is 4/2 SFR in Modesto you can also cash flow. I would recommend you look in an A class area like zip code 95355 because that zip code has the best school system in the area and also it's the safest in Modesto. Good luck with your hunting.
Residential Real Estate Broker · Modesto, CA · Member since 2017 · 3 posts · 0 votes
9y
Hey @Gurjeet Brar I'm a local property manager/realtor/investor here in Modesto. Seems like a good buy depending on area and HOA costs. Reach out to me if you'd like some more information on what rent you might get for your new condo. Thanks