mr5parkle

iTrader: (1)

so i'm in the market in purchasing a home. i've done the research about how much i should spend, where, etc. but i'm struggling with projecting 'resalability.' ideally, i'd like a 2br/2ba home but being that i'm in california, living square footage of those are similar to 1br/1ba. the area i'm looking into is in san jose, ca, has an extra den and has a lot of tech jobs around the area. i'm a single male and currently live in a house too big for my own good.

anyone out there ever own a 1br home? is it hard to sale? any regrets? if i can't sell it down the road, would renting be hard?

hornyleprechaun

Look to see how many are for sale in your area. Find out how long the average time on market has been for the area.

csmeance

In all honesty, forget buying and rent. Insurance is cheaper, no taxes and you don't have to worry about random things, the landlord will take care of it. As well you are free to move and don't have to worry about selling.

Look for "Luxury 2 bedroom apts or condos" in google and you can find a few awesome places. My rationale for 2 bedrooms is that it's a good idea to have the extra room. You can use the other room as a study/office so if you have a lady friend over you won't have to worry about any electronics or the cleanliness of your own bedroom.

Moog-Type-S

Don't buy a one bedroom condo. Not worth the coin, a royal pain when trying to sell it.

....btw... for trying to buy of all things a 1 bedroom condo in this real estate market?!?!?

Rent.

mr5parkle

iTrader: (1)

forgive my ignorance but i'm not very keen on real estate and have no real experience whatsoever. can you please tell me why it's bad to buy a 1br condo in this market?

the condo has been on the market for 10 days and they have an all cash offer tha'ts 10k less than listed price. when talking to them, they didn't even like the idea of selling it for the listed price. my agent told me if we threw in another 3k on top of the listing price, they'd take it.

NSXNEXT

iTrader: (2)

What's your financial situation? How much in bank, investments, 401K?
What's your plan for the condo? 1yr, 5 yr, 10yr?
What's your current living situation?

Will Y.

Resale value will be less-- generally, you will have fewer potential buyers and/or renters (if you decide to rent out the place when moving to another) compared to those for a 2-bedroom condo. More people can share 2-BR places than 1-BR places.
If this 1-bedroom condo is in an architecturally significant building or other specialized market, those caveats might not apply.
Ask your agent to explain marketability and other differences to you before you start waving cash and checks around.

Hornyleprechaun's advice from post 2 is good; you can expand on it and check the comparable values of 1-BR condos AND 2-BR condos in the area-- have your agent pull the comps for you. Then cross-check those comps using realtor.com or other real estate sites like zillow.com.

G/L.

Rounder

If you are going to stay there at least 5 years, I'd buy. If you plan on moving around, renting makes more sense.

mr5parkle

iTrader: (1)

I make over 70k a year with zero debt except for student loans of 206 per month. I have over 80k saved in liquid savings. I have over 60k in retirement and an automatic contribution of 5% salary to my work's Roth 401k to take advantage of the work's matching program. I've been maxing out roth iIra contributions for the ppast 3 years but will pprobably have to cut back after buying a hhome. My credit score is considered to be "excellent " based on the fico system.

Current living situations is free but will be needing to either rent or buy in a few months. My plan is to stick with the home for 3-5 years. I am open tto selling or leasing the property later. The area is surrounded by brocade, Cisco, Lockheed and many other high tech companies so high rent is common. The apartment complexes in the area charge 1400-1800 for one bedroom, one bath with shared underground garages.

The complex primarily has one and two bedroom units with only one other similar unit for sale at 328k. The last sale comparable to the property of interest was sold last may for 300k. Two bedroom properties in this complex have sold for 400k+ this past year. Sales history and public record have shown that one bedroom properties in this area have hovered around the 300k sale price since 2003. Older records could not be found in my searches online. 400k home is definitely a far reach with regards to my budget comfort and i dont want to so spend that much. The complex appears to be well occupied with very little for sale signs. Im assuming thats a good indicator of happy residents who like to live there or the investors of the properties are doing a good job at leasing them.

doopstr

Could be a good opportunity if you plan to turn it into a rental later.

Will Y.

FYI, if you are getting a loan, lenders often have limits on the permissible percentage of rentals in a condo complex, so you may want to find out the current percentage of rentals there.

mr5parkle

iTrader: (1)

i will look into that with my mortgage broker and will also read through the HOA documents.

The Dougler

iTrader: (1)

depends on your local market. Around here 1 bedroom condos spend around 7-14 days on the market. But it's a hot marketplace, might be different demographics where you are.

MR1

SJ market is strong and expensive. In that market a one bedroom may be better accepted. Couples usually want or need more space and where will you put visitors that don't sleep in your room? How do the HOA fees compare? Why do you want to buy vs rent? What if you decide a room mate is in order? How much more expensive is it to buy rather than rent?

Finally, are you prepared to accept a large price decrease in the units if it comes to that?

mr5parkle

iTrader: (1)

this home has a large den too that is separated with walls and entry. if i threw up a door and closet, it'd be it's own "bedroom." HOAs is actually pretty low (low 200s). in south bay, it's not uncommon to see 350-400 HOA fees. HOA fees include garbage, water, landscaping, community electricity/gas and insurance, and pool. no club house but i don't care for that stuff anyways. the visitors will sleep on the couch i'd only seek a roommate if finances begin to suffer but hopefully that won't be necessary. i want to buy b/c i have the funds for a down, plan on living and staying with the current job for 3+ years, and rates are very low. comparable rentals that i'm looking at are 1200-1400 a month but monthly mortgage w/o HOA looks to be 1200-1250.

MR1

Didn't answer my last question but all other sounds like a potential go. G/L and keep us posted.

mr5parkle

iTrader: (1)

oh sorry, it must've been cut off the screen when i was replying.

yes, i am prepared to take a hit if/when the economy busts but i hope to be in the next stage in life when the economy recovers. i've had some mild risks in the stock market and that was scary and taught me a lot about accepting risks. but this is the hugest risk i'm taking on b/c i don't think i've fronted that much cash in any purchase, gamble, or investment ever. but, i believe i am accepting of the risks involved and do want to purchase a home. i just wanted to see if anyone here has had experience in owning a 1br home so i can pick their brains.

MR1

Markets vary, that is why you got such different feedback. I have not lived a one bedroom but do own some one bedroom apartments. I have no problem keeping them rented but again, a different market.

Personal decision if you want rent receipts vs mortgage. In your transient high cost market one bedroom might not be bad as demand is high. Again, just be aware that long term there may be no financial advantage to buying, only potential personal satisfaction. If your employment market takes a 10% reduction you may not be able to give your place away. Just a thought because it has happened in other parts of the country and as close as about 100 miles east of you.

GIBSON6594

I'm looking now and 1 bedrooms are absolutely out of the question.

Rounder

http://coopandcondo.com/ good website with information on condos and coops.

mr5parkle

iTrader: (1)

gibson: you're looking at this thread for the first time or looking into buying a 1br condo? in either case, can you tell me why you wouldn't buy?

thanks rounder, i'll read through the site.

1StGenCL

I rented a 1/1.5 in a luxury high rise downtown within walking distance to absolutely evertything including walking over the bridge to palm beach island for the beach. I loved the place and it was perfect for me being a single male but the HOAs were around $620 a month and there's no way my rent ocovered all the bills unless the lady had no mortgage.

Again, I loved the place but for a few hundred more a month, I could have had a 2 bedroom with way more room and the flexibility to have a roommate if ever needed. I contemplated buying the unit because prices were low but I kept thinking what a terrible investment it was. All off the 2 or 3 beds rented quicker and to be honest, it started to become small with a girlfriend staying over and such. Now the girl now lives with me and just closet space alone would have been an issue there so I am so glad I didn't buy it.

If you really do plan to stay, keep in mind a lot can change in three to five years and you are really stuck with the place if life changes. While the American dream is to own a home and they have always been considered a good investment, I don't know if I could justify it now. People no longer keep their jobs for life and you have to make sure you can sell that place quickly without getting killed if you do loose your job or need to move for it.

All that being said, if you live in a tech place with good jobs or a place like DC when companies look for short term furnished places for big wigs often, it may work. Lots to think about.

mr5parkle

iTrader: (1)

thanks for the advice! and $620 HOA?! that's insane. i hoped that included a club house filled with hot chicks in bikinis.

i don't plan on moving anywhere for years after i purchase a home. now, i can never precisely predict the future and the worry of unemployment will always be in mind, but i believe my particular industry (biotech) is fairly solid. but we recently got acquired by du pont. the acquisition has made the future of my company much more hazy but i'll have to deal with life as it comes.

ReflexRacing_com

I currently live in a 1bd/1ba condo in Orange County, Calif. I was in it for 7 years and now plan to rent it out since I just bought a new single family home in north orange county. There are a lot of them for rent for roughly $1300-$1500/month, and if I could get 1500, that would cover my mortgage and I would just have to pay the HOA's.

I am of the opinion that there is always a market for 1bd/1ba, sure it might be smaller than actual homes, but young couples, bachelors(like yourself) or just single people make it a very reasonable purchase. I'd say go for it and buy. It's a great time to get in now and if you happen to move out in < 5 years, rent it out, then when the market bounces back in _____, go ahead and sell it and buy a bigger home for your family.

Just my

mr5parkle

iTrader: (1)

thanks for the advice! this was what i was looking for. someone with experience in owning a comparable home in a comparable market. glad to hear it worked out for you.

if anyone else can chime in, it'd be great. i'd like to hear the good and bad of 1br/1ba homes.

mr5parkle

iTrader: (1)

well, just signed escrow papers and should be closing escrow within a week.

listing price was 310k, but lowered to 305k on a 1br/1ba/1den condo. locked a 30 year rate at 4.25% and HOA is 224 including water, sewage and trash.

i now live in the american custom of accruing large amounts of debt.

Rounder

nice, congrats!

doopstr

Welcome to slaving for the bank for the rest of your life.

Will Y.

Congrats!
At least you have something tangible to show for it, and it won't depreciate in value like a car, boat or jet ski.

GIBSON6594

You sure about that?

Will Y.

Gotta include the rest of the phrase-- a condo in Silicon Valley might depreciate in value by some percentage, but not to the extent of a car, boat, etc.

MR1

....as far as we know right now!

Congratulations OP

mr5parkle

iTrader: (1)

actually, my s2000 hasn't depreciated much due to the low inventory of new/used japanese cars caused by the tsunami.

i bought it in 2009 for 17.1k and kbb says it's worth 16.6k today after adding ~40k miles on it.

mrstak

iTrader: (1)

You're gonna have to sell the s2k to pay for your apt...lol

KIDDING! Congrats on your purchase man! It's a hugeeeeee step... on this big financial investment. Can we get pictures of it once everything is set in stone?

1StGenCL

CONGRATS!!!

Now lets see some pics