Re: 1 bed condo?? - Posted by Frank Chin
Posted by Frank Chin on March 13, 2006 at 07:18:39:
My theory on this is generally, if you buy cheap, expect to “sell” cheap, unless you ride the RE cycles. I’ve bought, sold, rented out 1 BR condos.
At the bottom of the last down cycle of the market here in NYC, and the NE of the US:
I’ve been to auctions in condo and coop complexes where the majority of the units in foreclosure are one BR units, or studios. No one wanted them.
I’ve attended many an auction where there were no bidders.
There was one auction I showed up at where I was the only LOOKER showing up, together with the auctioneer, and the agent representing the bank. I wasn’t going to bid, so when the hour came, the auctioneer ask me if I was going to bid. I said "why don’t you give it 15 more minutes for people to show up. The 15 minutes came and went, I submitted a ridiculous low ball bid which was later rejected.
I bought a one BR condo at auction up in MA at the time when there were 80 out of 100 units in the building foreclosed, the majortiy one BR. After the auction, 40 were left, mostly one BR. A year later, most of the 40 was still available, and I bought another one, LESS than the auction price.
I tried selling the units in 2001, thinking it was the top of the market, but had no luck, one reason being the agent I used was not up to par. Finally sold it last year, when the market really peaked, at 50% more than what was listed in 2001, but didn’t move.
As I also rent out one BR, and 2BR units here in NYC, I find I get more quality tenants in 2BR units vs “low end” one BR units.
For the low end one BR units, I get security guards, recent immigrants looking to squeeze a few people into the one BR. Or I get a more quality tenant staying for a short while before they move on.
For 2BR’s, my favorite target tenant are widows, widowers, retirees, “well to do singles” etc. While any one of these can squeeze into a one BR, they often rent the 2BR because they need an extra room when the grandkids come, or an extra room to put the computer in the “surf the net”. Not the type that rents my one BR who’s always one paycheck away from being out on the street.
It’s curious but often, the renters of my 2BR moves because they got a retirement home in FL to move to, got promoted to a better job etc. The younger one BR tenants often move home to mom when they lost their job.
These “well to do” single tenants rent the 2BR’s by choice. Those theat rent the one BR often has no other choice, except perhaps a studio.