Single, 25 year old male looking for a studio condo at SW Waterfront. Good investment or no?

Asked by Raf, Washington, DC Tue Aug 2, 2011

New to the Q & A. Just have a quick question for you guys, as the description said, I am a 25 year old single male. I'm currently renting an apartment in Columbia Heights for about $1400, and I've come to the realization that my preference is to buy a condo somewhere in DC. My search has gone on for about a month, and I have closed in on the SW Waterfront area. The location is ideal, Metro/CVS/Starbucks/Safeway all a block away from me, which is good b/c I don't own a car. The thing is though, it's a 621 square foot studio, with an HOA fee of $301 (which includes all utilities but cable). I guess my ? is, in this market, is a 621 square foot studio condo at $199K a good investment? I'm priced out of all the main areas in DC, and if I had to choose between the SW Waterfront or NE/SE DC, I'd rather go with the Waterfront since I see that area booming in the next 2-3 years. I'll add more info if necessary, just wanted to get people's thoughts on this. I'm a first time home buyer.

Help the community by answering this question:

+ web reference
Web reference:

Answers

14
James Downing, Agent, Dunedin, FL
Sun Aug 7, 2011
BEST ANSWER
Raf- I have read the answers to the questions and want to make sure you have the correct answers; as I believe many of these answers are flawed.

There are only a very few CONDOS for sale in SW for under 200k. Most are co-ops. As for condos; there are only a couple of options; the main one being Potomac Tower. They have many different floor plans available and have reasonable monthly condo fees. I have sold a couple of units there and the owners seem to enjoy the units and the location.

SW DC has been a good value for some time; and continues to be one of the lower priced areas. A studio in Dupont or Logan will run you in the 225k range; but SW has a few under 200k.

I don't agree with the logic that 1 bedrooms are always a better investment. Studios and 1 bedrooms are and always will be at different price points. If someone can afford 250k+ right now; they buy a 1 bedroom in SW; they can only afford 200k; they are buying a studio.

With interest rates so low; it can be an excellent time for an investment; especially as we see rents rising throughout the city.

There are only a few condos in SW; they include: Potomac Towers, The Carrollsburg, Riverside Condos and Town Square (700 7th St). Many other SW properties are co-ops (River Park, Harbour Square, Tiber Island); which are priced very low; but are a bit different type of ownership than condos.

Co-ops are not bad investments; but you need to understand the pros and cons of them. A couple differences include: a higher downpayment required (10% is probably the lowest you can get right now); and most prevent you from renting out if you decide to do so. The co-ops are having a very hard time selling right now; thus you see studios for under 150k currently.

Hope that helps. Good luck
Web Reference:  http://www.metrodchouses.com
0 votes
Amy Fisher, Agent, Washington, DC
Tue Aug 2, 2011
Studio units anywhere are a difficult resale. If you can up the ante and squeeze into a 1 bedroom you will do yourself a favor. Also resale financing is complicated for many condos these days with many restrictions and limitations. Even if you can get financing if the % of owner occupants vs investor owners should change unfavorably during your ownership or more than 15% of the owners should be 30days delinquent or more on their condo fees you may find it difficult for your buyer to get financing.. discuss with your agent for more details or make an appointment and discuss with me if you have no agent yet. Best AF
Web Reference:  http://realtygrouinc.net
1 vote
Susan Isaacs, Agent, Washington, DC
Mon Aug 22, 2011
Hi Raf,
As you can see, there is no cut and dried answer to what is or is not a good real estate investment. So much depends on the building, the health of the association and sales history, the market at any given time and a myriad of ofher factors, that giving a pat answer to this question would be a disservice. As a first time homebuyer, you should be working with an experienced agent who knows SW. There is much, much more to a real estate transaction than guesstimating whether or not the property is a good investment at the list price. As you likely already know, commission for your buyer agent is paid by the seller, so there's no reason not to take advantage of expert representation for your transaction. Have your new agent explain the differences between co-ops and condos. See my web reference and good luck!
0 votes
Melissa Bark…, Agent, Washington, DC
Wed Aug 3, 2011
Hi

As others have said, a studio is not as easy a re-sale as a 1BR unit would be and is it a condo or a co-op since there are several in the area and the difference in monthly fees you pay can be quite large (with the underlying mortgage you are paying on for the co-op as well as the condo fees).

It also depends on how long you want to be in the area and how long do you see yourself living in the unit?

I would recommend getting a buyers agent to walk you thru all the positives and negatives of this unit or others you are considering purchasing.

Good luck!
Web Reference:  http://www.wdcmetroagent.com
0 votes
Alexandra Sa…, , Washington, DC
Tue Aug 2, 2011
Hi Raf--I am working with another buyer in the SW Waterfront area right now and I will tell you that there are at least 12 listings right now of other properties that are under $200k that are one bedrooms and not studios. As one of the other agents noted, a one BR unit is always going to be a better investment in terms of resale value/ability than a studio. As I am very familiar with the inventory in that area right now, I would be happy to send you those listings and show you any properties you may be interested in to give you some perspective, at the very least, on what is out there in your price range right now. Just shoot me an email at alex@c21redwood.com whenever you get a chance. Thanks!
Web Reference:  http://www.alexsellsdc.com
0 votes
John Loulan, , Washington, VA
Tue Aug 2, 2011
Do you have an agent? You need an experienced agent to represent you and put together the facts and figures you need to make an intelligent decision. It takes time and energy to give you the guidance you deserve. But here are my quick thoughts and I hope they help.
First, if you are not committed to owning the unit for five at least years continue to rent.
Second, I agree that SW is ripe for appreciation, it has been overlooked by many.
Third, one bedrooms are available in your range and sell better than studios.
I am a fourth generation Washingtonian with over twenty years of real estate experience.
My email is; johnkwre@yahoo.com
0 votes
Gene Misurel…, Agent, Washington, DC
Tue Aug 2, 2011
Ann & I are both agents living in SW Harbour Square for 11 years. $199 sounds a bit high for a studio unless it has a great water view.

Ann & Gene Misurella
Agents
0 votes
Kelly Putz, Agent, Fairfax, VA
Tue Aug 2, 2011
Hi Raf,

I would say it is a good investment. Not just because it would get you out of paying rent, but when you are ready to upgrade to a larger place, it will make a good rental property for you. That's a great area that seems to be a hidden treasure a lot of buyers in DC don't look at for some reason.

The other option in your price range is a coop, but they will require you to use one of their approved lenders and the fees can be kind of high, depending on where you buy. That being said, there are some great ones out there.

Good luck!
:)
Kelly

kelly.putz@gmail.com
Kelly Putz
Buyer's and Seller's REALTOR®
DC/MD/VA
Keller Williams McLean
http://kellyputz.kwrealty.com/
703-961-8663
0 votes
Andy Peers, Agent, Washington DC, DC
Tue Aug 2, 2011
Carrollsburg Condominium has one bedrooms around 200k. That said, those one bedrooms are slightly smaller than the place you mentioned. Plenty out there.

Check out my recent Twitter post with SW Waterfront places with water views
0 votes
Kwaku Lomotey, , Washington, DC
Tue Aug 2, 2011
SW is good just pay attention to the maintenance fees and taxes.
0 votes
Raf, , Washington, DC
Tue Aug 2, 2011
I would love to get a one bedroom, the thing is its roughly $40K more expensive, and I can't swing that. I've got other monthly expenses that I need to take care of and I'd have my head barely above water.

David - yes, it is a condo.

Thanks a lot for the answers so far, much appreciated. Seeing as how I don't have a car, I rely more on the train than anything else. The fact that there's on ea block from me is perfect.
0 votes
Faraji Whalen, Agent, Washington, DC
Tue Aug 2, 2011
We rent out a few condos in the Waterfront area. People do really like the proximity to L'Enfant Plaza and the Safeway/CVS/DCRA complex and there is certainly upside given the development occurring in the area. Whether or not it's a good investment is really dependent to some degree on your personal needs. The value of your primary (non-investment property) has a lot to do with the personal enjoyment you get from living there. If you enjoy your neighbors and neighborhood amenities, the commute is reasonable, and you are generally happy with your living experience, then it may be a good buy. If you're just looking for capital appreciation, the calculus is a bit different because you're speculating on the market and macroeconomic forces. The flip side to buying vs. renting is the limits it may put on your mobility. If you get an opportunity in another state or country, you'll have to either sell or rent your condo or eat the mortgage and condo fees, and at 25, the value of being able to pick up and go with a month's notice does have a significant amount of value. Sorry I couldn't give you a more concrete answer. The NYTimes article link may help you work through the decision factors.
0 votes
Andy Peers, Agent, Washington DC, DC
Tue Aug 2, 2011
RAF- I own in SW and LOVE IT! The Waterfront is one of the few areas in DC which is still a buyers' market (based on absorption rate). And yes, the area is great for a single person of any age. Trust me on that.

Too much to add. Call or write me to discuss. Check out my site SWDChomes.com. I have many other resources to share.

And BTW, 621 sq' for under 200k is in the ballpark. Depending on condition, building, etc.

Andy
Web Reference:  http://Www.SWDChomes.com
0 votes
David Burnham, , Washington, DC
Tue Aug 2, 2011
I have a client currently looking in the SW waterfront area and I think the places offer very good value. There are a lot of coops in the area, but you mentioned a condo and for the price you are talking, it sounds like that is a condo, but you will want to make sure.

I am not sure how much of a boom you will get in the next few years, but I do think the market is relatively stable. There are a lot of new condos being built in waterfront communities and they are selling reasonable well, but not nearly as well as the downtown area. If the area around the National ballpark picks up again, then it will help, but I think that is probably more than 2 years away.

Let me know if you need any help with your search.
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more