Are one bedroom condos bad investments in los angeles (Culver City: for sale, rental)

[TheGreatUnwashed]

I'm currently living in the Palms/Culver City area and can't afford 2 BR condos. Would you say a 1 BR would be a safe investment on the westside? The area seems desirable enough that it shouldn't be too difficult to sell?

[BRinSM]

to make this determination i would use a site like redfin.com to determine recently sold 1br units in your area. if there looks to be a healthy number of sales, i think it's safe to assume that there is enough demand for a future purchase to be considered a safe investment. the bigger question you need to ask yourself is if you could live in/own a 1br condo long enough to justify the purchase. if you buy with intent to sell after a few years, you'll probably lose money considering the rather large closing costs you'll need to pay.

also remember that unless you have 20% down for a condo, you'll have to get a FHA loan. these loans aren't to hard to get, but it requires that you find a building that is FHA approved. unfortunately, not very many buildings on the westside are FHA approved.

good luck!

[JohnG72]

Originally Posted by tmblackflag

. Would you say a 1 BR would be a safe investment on the westside?

Wrong question.

Your term "investment" implies that you will not reside there very long. IMO this is ultimate housing fail at this point in possibly the most bubblicious neighborhood remaining in So Cal.

My advice to you is do a search on Redfin of properties with the specs you are looking for that have sold in the past three months. Note prices and HOA's. Then do a search of listings. Now factor in that 5 MILLION people nationwide are behind on their mortgage payments by at least two months.

[DowntownVentura]

Originally Posted by JohnG72

Wrong question.

Your term "investment" implies that you will not reside there very long. IMO this is ultimate housing fail at this point in possibly the most bubblicious neighborhood remaining in So Cal.
<snip>.

Maybe not live there long but he may intend to hold on to it for a while.

[JohnG72]

I would contend that there is not one single one bedroom condo for sale on the westside where you can put 20% down and come out cash flow positive after factoring in mortgage and HOA.

[BRinSM]

Originally Posted by JohnG72

I would contend that there is not one single one bedroom condo for sale on the westside where you can put 20% down and come out cash flow positive after factoring in mortgage and HOA.

however, if you also factor in the tax savings on a mortgage from interest and property taxes, you could even end up cash flow positive in the right unit.

[JohnG72]

Can't deduct the interest from mortgage on a rental property. There are other deductions, but those may not exceed the amount of the standard deduction, particularly if OP doesn't own any other property.

Page 2, section titled "Qualified Home".

http://www.irs.gov/pub/irs-pdf/p936.pdf

[BRinSM]

i think the OP is looking for condos to live in, so the mortgage interest deduction would be in play.

[TheGreatUnwashed]

I am indeed looking for something to live in, probably for at least 5 years.

[JohnG72]

^^^^^^^^^If thats the case, why do you care about "safe investment"?

Its not going to be much better or worse than anywhere else at this point. Maybe a little more correction than elsewhere.

What you need to balance is if its financially worth buying at the moment. I would not count on or discount future appreciation.

Stuff on the westside will always be sellable...well maybe not "always", but pretty damn near that. However, you may or may not like the pricepoint it would sell at.