Found a City Center bargain

[Anonymous]

Anonymous wrote:No dog in this fight, but I think the hate on this place is overdone. These apartments are well built and very nicely outfitted relative to your standard DC fare (appliance quality, cabinets, etc). Personally, I prefer that kind of quakity over quantity (ie, square feet). The HOA isn't cheap, but, again, lesser buildings still charge $600-700 and may not include parking / storage. Perhaps a little overpriced given where rates are, but don't think it should be compared to more dumpy 1-2 bedrooms (like some posted above). And remember that in comparing with a rental, you've got to factor in: 1) the tax savings on currently high interest rates; 2) the monthly equity your building. Once you do, and considering the higher quality build/design of these units (space concerns aside), I think these apts can make good sense for the right person.

Although generally I would agree with you (especially quality over quantity), in this case I think we need to have baseline quantity and 600sq ft is simply not that. Furthermore (and I know you didn’t mean that when you said quality)that area is really declining, and part of real estate is location. I am sure most people would rather live in a higher quality area but with older interior than vice versa.

In terms of cost/financial sense, in this market and in terms of this property (or condos in that specific area) I also disagree. Property values for those condos in that area have been decreasing over the past 5 years, so you aren’t building that much equity. Furthermore, with the recent arena announcement and increasing crime, I would be willing to bet that they will continue to decrease there (or stay stagnant) so the equity argument not as strong.

Last, the actual payment/cost. The total monthly payment assuming 20 down and 7 rate is around 4800. From that, 1000 goes towards hoa, 500 towards property tax and around 2900 for interest (granted interest portion goes down overtime but chances are not significantly before sold). There your total monthly cost on the place that is just cost (does not contribute toward equity) is 4400 (ie only around 500 a month going towards the principal/equity). Sure you can itemize the interest and property tax and write that off, but even in a best case scenario that’s what, a couple hundred (per month) gained when compared to the standard deduction?

With such a cost breakdown it truly does not make sense to own that tiny apartment in a declining area, when you could rent something in a nicer area for 2500. Your cost of rent is still less than the 4400 cost that just disappears (not going towards equity).

[Anonymous]

I mean the fee includes water, gas and your parking spot more than likely. It's still high, but at least most of your utilities are covered.

[Anonymous]

Beautiful finishes on your glorified studio.

[Anonymous]

Anonymous wrote:

Anonymous wrote:No dog in this fight, but I think the hate on this place is overdone. These apartments are well built and very nicely outfitted relative to your standard DC fare (appliance quality, cabinets, etc). Personally, I prefer that kind of quakity over quantity (ie, square feet). The HOA isn't cheap, but, again, lesser buildings still charge $600-700 and may not include parking / storage. Perhaps a little overpriced given where rates are, but don't think it should be compared to more dumpy 1-2 bedrooms (like some posted above). And remember that in comparing with a rental, you've got to factor in: 1) the tax savings on currently high interest rates; 2) the monthly equity your building. Once you do, and considering the higher quality build/design of these units (space concerns aside), I think these apts can make good sense for the right person.

Although generally I would agree with you (especially quality over quantity), in this case I think we need to have baseline quantity and 600sq ft is simply not that. Furthermore (and I know you didn’t mean that when you said quality)that area is really declining, and part of real estate is location. I am sure most people would rather live in a higher quality area but with older interior than vice versa.

In terms of cost/financial sense, in this market and in terms of this property (or condos in that specific area) I also disagree. Property values for those condos in that area have been decreasing over the past 5 years, so you aren’t building that much equity. Furthermore, with the recent arena announcement and increasing crime, I would be willing to bet that they will continue to decrease there (or stay stagnant) so the equity argument not as strong.

Last, the actual payment/cost. The total monthly payment assuming 20 down and 7 rate is around 4800. From that, 1000 goes towards hoa, 500 towards property tax and around 2900 for interest (granted interest portion goes down overtime but chances are not significantly before sold). There your total monthly cost on the place that is just cost (does not contribute toward equity) is 4400 (ie only around 500 a month going towards the principal/equity). Sure you can itemize the interest and property tax and write that off, but even in a best case scenario that’s what, a couple hundred (per month) gained when compared to the standard deduction?

With such a cost breakdown it truly does not make sense to own that tiny apartment in a declining area, when you could rent something in a nicer area for 2500. Your cost of rent is still less than the 4400 cost that just disappears (not going towards equity).

+1
buying this place makes zero financial sense and particularly for someone who would need to take a mortgage to finance it. With current rates the contribution to principal are minimal in the first years of the mortgage. And one also needs to consider the transaction costs of buying and selling. It would be very hard to come ahead on this purchase. You can rent a similar apartment for less than 3k in places like Rosslyn or Clarendon, with the added bonus of less crime and potentially a much better view, and invest the downpayment and closing costs instead.

[Anonymous]

It's obvious that 600 sq feet is too small when you look at that small bedroom closet, the horrible basic bathtub, and the bathroom sink that doesn't even have a vanity (am I the only one who needs counter space for toiletries?). For a luxury condo, there are some really odd choices about how to allocate space, but it probably just comes down to the fact that it needs to be bigger.

[Anonymous]

Anonymous wrote:For a luxury condo, there are some really odd choices about how to allocate space, but it probably just comes down to the fact that it needs to be bigger.

The target market for this building is someone who lives elsewhere and travels frequently to DC for work. It’s a hotel room alternative in most cases.