Is buying a one-bedroom condo ever a good idea?

[Anonymous]

Anonymous wrote:It's not worth it. Condos, especially one bedrooms, don't appreciate as much as a house or townhouse does. DC isn't nyc or San Francisco. Unless you plan on living in it and never selling it and using it as a rental, it won't gain as much equity as a house will. I see too many people buying condos and being confused as to why it barely goes up in value in 5 years. Condos have their board that basically control everything and they can dictate to raise the condo fees at any given month if the board agrees to it.

The bolded is key, OP. You can make bank renting out a downtown condo, provided the HOA fees aren't ludicrous. That's where the real value would come from if you moved out - otherwise, don't expect much appreciation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:you can absolutely find a 2br for under $600k! Looking at redfin for 2brs with condo fees under $600/month yielded options in Glover Park, Shaw, Dupont, Adams Morgan, Columbia Heights, Hill East, and more. https://www.redfin.com/city/12839/DC/Washington-DC/filter/property-type=condo,max-price=600k,min-beds=2,hoa=600,viewport=38.8895:38.85696:-76.98031:-77.03601

I think the issue with selling a $600k 1br is that it will be a very expensive 1br, not the fact that it's a 1br.

I would only buy it if the condo rules were very generous about allowing the condo to be rented out. Then if you couldn't sell it but you wanted to move, you'd at least have the option of renting it out.

Redo that search with ground floor / basement units filtered out. There is no 2br/2ba in that price range in those neighborhoods that is above ground and has low fees. If you want a second bathroom (a requirement, imo, for even considering a roommate situation), w/d in unit, the ability to control your own heat/air, and other "luxuries" that are now considered baseline necessities, you're looking at $800k for a 2/2 and $600k for 1br.

More problematic than buying a one bedroom condo would be buying a ground floor unit of any size. No amount of liar lens photography and "your own private terrace!" can make up for the degraded security, unavoidable water/mold problems, and increased pests.

https://www.redfin.com/DC/Washington/2400-41st-St-NW-20007/unit-204/home/9958760 doesn't appear to be ground floor. Neither is https://www.redfin.com/DC/Washington/1615-Q-St-NW-20009/unit-907/home/9866246 or https://www.redfin.com/DC/Washington/4016-Georgia-Ave-NW-20011/unit-6/home/164421464 or https://www.redfin.com/DC/Washington/3733-12th-St-NE-20017/unit-201/home/147109519 (so Glover Park, Dupont, Petworth, and Brookland). Now these might not be the neighborhoods or the square footage or whatever that OP wants, but there are 2brs (some, including the Petworth and Brookland ones listed here with a second bath), under $600k and with condo fees under $600 a month. OP doesn't have to buy one, but it would be wrong to say they don't exist.

I also don't think a second bath is a requirement if your goal isn't to take on a roommate but to increase your ability to rent or resell the place in the future. A desirable school district can balance out one bathroom for a family renting (there are definitely people who will take any 2br IB for Stoddert, like the Glover Park one I mentioned) as can proximity to metro.

[Anonymous]

I wouldn't buy a 1 bedroom. Back in 2008, I was looking for a 1 bedroom condo actually. I wanted to have a very small mortgage payment and I gave myself $300K budget. Well, I didn't like any 1 bedrooms and ended up with 2 bedroom condo with a higher budget, $395K. I quickly outgrew the 2 bedroom, 1.5 bath condo, I'm so glad I bought that place. When I sold it 10 years later, I made over $150K. I also got a roommate some of the time so I could have extra traveling money.

I would not have made any money had I bought a 1 bedroom, as I wasn't considering bad neighborhoods back then. Had I bought in a bad neighborhood, I imagine the most I would have made is $50K... and then I would have had to live in a bad neighborhood as a single female.

You have a healthy budget for a 2 bedroom. I would buy at least a 2 bedroom. Get a unit with parking. Definitely don't buy a basement unit.

Some examples:

https://www.redfin.com/DC/Washington/1012-Harvard-St-NW-20001/unit-2/home/110010403

https://www.redfin.com/DC/Washington/1367-Florida-Ave-NE-20002/unit-401/home/55187373

[Anonymous]

Anonymous wrote:If we all had crystal balls, we'd all be rich.

Historically 1bd condos in DC have only done so-so, since supply isn't constrained. If prices go up, new construction pops up in the new 'hot' neighborhood. Very few places, with the exception of Chinatown and parts of lower Dupont are fully built out. Supply seems to catch up with demand. This is especially true as most 1bd buyers do not care about schools/are amenable to semi-gentrified areas. Taste in amenities changes over time. (Roof decks are now a thing, will they be in 20 years?) There are just two limiting factors, the availability of lots and the cost of construction. The market reflect this. Now if things change, then prices will go up/down.

This is not true for SFH/town-homes. Buyers tend to care about schools. School gentrification is much much slower than property gentrification. This is why WTOP/Cap Hill has such a price premium. Plus, there just aren't that many lots where it is feasible to build or add to supply within DC limits. But this advantage may now be *fully priced* into the value - so it isn't clear that there will be more future growth. Some of these properties gained value since lots of millennials decided they wanted to live in the city rather than in a suburbs, but the boomer sellers didn't know that when they bought 30+ years ago. My neighborhood WOTP is now full of dual income 30-somethings with younger kids.

Keep in mind, many SFH are only worth 1M+ due to the price of the underlying land, NOT the actual property. (There is no way a physical row house/duplex in Glover/AU is worth 1M; rather, each row house is worth 300-500K, with the rest being the value of the land they sit on) The market reflect this. Now if things change, then prices will go up/down.

Again, lots of things are already priced in to home/condo costs. The market reflect this. Now if things change, then prices will go up/down. It is hard to predict the future.

Great point. I never considered this, and I always wondered why the prices for 1 bedrooms have pretty much stayed constant.

[Anonymous]

Anonymous wrote:I have an amazing apartment in downtown DC and am unwilling to sacrifice my quality of life to move further out. My budget is $600k, which buys a pretty nice one bedroom condo downtown. I've always heard that condos are a terrible idea in general, but if you insist on buying one, make sure it has at least 2br/2ba. Obvi, that's not going to happen in my budget around here. Am I setting myself up for a lot of hassle and expense if I buy a one bedroom condo in one of these new luxury buildings downtown, or should I keep renting to maintain my quality of life? Kids and schools are not a concern.

I'd absolutely consider a 1 BR condo/co-op in a city like NY, possibly Chicago. DC, no way... not a chance. In DC, I'd be in a row home minimum. Communal living has way too many downsides for me to buy into it unless I'm dealing with extreme conditions.

That said people saying condos don't appreciate are wrong; condos move with the market up and down as people trade costs and benefits against superior alternatives. But because condos, especially 1 BRs, are entry-level properties, when there are downturns, obviously there can be much greater downside risk. Buyers of 1BR condos can disappear and reappear very quickly.

Ultimately though, you shouldn't be too concerned with appreciation given you are an owner-occupier. It's not an investment, it's something you need to live.

[Anonymous]

Anonymous wrote:If you’re retiring and don’t want a huge house and it’s walkable then who cares if it’s a good deal? If you’re young buy a townhouse.

Because you have no guest room.

[Anonymous]

Anonymous wrote:Mine was a great purchase. Turned a 6 figure profit over 5 years of ownership. My friends who bought townhouses in the burbs haven't seen anything close to that appreciation.

That turned out very well for you, but the next 10 years won't bring the same kind of rapid appreciation that the previous 10 years brought.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Mine was a great purchase. Turned a 6 figure profit over 5 years of ownership. My friends who bought townhouses in the burbs haven't seen anything close to that appreciation.

That turned out very well for you, but the next 10 years won't bring the same kind of rapid appreciation that the previous 10 years brought.

How would you know that? Have a crystal ball that no one else does?

[Anonymous]

At your budget I think you can find a small 2 bedroom, or a 1 bedroom + den, even if it's a basement level unit.

https://www.redfin.com/DC/Washington/1514-8th-St-NW-20001/unit-2/home/104463499

https://www.redfin.com/DC/Washington/2020-12th-St-NW-20009/unit-218/home/10347241

[Anonymous]

Super location? Beautifully appointed? Big closets? Parking?
Yes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Mine was a great purchase. Turned a 6 figure profit over 5 years of ownership. My friends who bought townhouses in the burbs haven't seen anything close to that appreciation.

That turned out very well for you, but the next 10 years won't bring the same kind of rapid appreciation that the previous 10 years brought.

How would you know that? Have a crystal ball that no one else does?

different poster - Past performance is not indicative of future results

[Anonymous]

1 brm condo dweller here. The condo is very spacious and we've built out an extra bedroom -- if you are sub 800 sq ft, that would be hard to do.

We bought 10+ years ago, WOTP, and are very happy. We have a middle school kid, love our school district, and likely will stay here until the kid graduates college and beyond.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It's not worth it. Condos, especially one bedrooms, don't appreciate as much as a house or townhouse does. DC isn't nyc or San Francisco. Unless you plan on living in it and never selling it and using it as a rental, it won't gain as much equity as a house will. I see too many people buying condos and being confused as to why it barely goes up in value in 5 years. Condos have their board that basically control everything and they can dictate to raise the condo fees at any given month if the board agrees to it.

The bolded is key, OP. You can make bank renting out a downtown condo, provided the HOA fees aren't ludicrous. That's where the real value would come from if you moved out - otherwise, don't expect much appreciation.

That's the thing. Most downtown condos do have HOA fees that are ludicrous. $500+ for a piece of cement on the roof? No thanks. And don't get me started on the buildings with swimming pools. You pay a massive fee all year for something you can share with a few hundred other people for all of 3 months.

[Anonymous]

Anonymous wrote:It's not worth it. Condos, especially one bedrooms, don't appreciate as much as a house or townhouse does. DC isn't nyc or San Francisco. Unless you plan on living in it and never selling it and using it as a rental, it won't gain as much equity as a house will. I see too many people buying condos and being confused as to why it barely goes up in value in 5 years. Condos have their board that basically control everything and they can dictate to raise the condo fees at any given month if the board agrees to it.

You don't seem to know exactly how a Condo works. Boards can't raise Condo fees any given month. Board approve budgets for the YEAR. Owners get at least 30 days to review a draft budget before the Board votes on it. The only time a Board can raise fees during a year is if the expenditure is more than 15% of the budget . The owners would have to approve that expenditure.

[Anonymous]

Anonymous wrote:

Anonymous wrote:you can absolutely find a 2br for under $600k! Looking at redfin for 2brs with condo fees under $600/month yielded options in Glover Park, Shaw, Dupont, Adams Morgan, Columbia Heights, Hill East, and more. https://www.redfin.com/city/12839/DC/Washington-DC/filter/property-type=condo,max-price=600k,min-beds=2,hoa=600,viewport=38.8895:38.85696:-76.98031:-77.03601

I think the issue with selling a $600k 1br is that it will be a very expensive 1br, not the fact that it's a 1br.

I would only buy it if the condo rules were very generous about allowing the condo to be rented out. Then if you couldn't sell it but you wanted to move, you'd at least have the option of renting it out.

Agree with the last sentence. Make sure you are able to rent the unit to others. Thats another reason why I'm put off on condo buying, the board can change the rules on that any time they want.

Boards cannot change rules anytime they want. There are very specific rules in place for Boards to change rules in a Condo depending on your County and state. Any proposed rule change has to be reviewed by Owners before it gets voted on.

You need to read the Condo documents before you buy to know exactly how that particular Condo functions and what rule are in place. Also ask to review the past few Board meeting minutes so you know what issues are being discussed by the Board and the Community. Make sure reserves are beign put aside at a proper rate for future repairs so you wont incur a special assessment.