Tradelite, since I've rented out my condo in DC recently, I thought I would share (though I apologize since I'm hopping into this conversation a bit late). I have 2BR/2BA condo in the heart of Dupont Circle. It rented for $2450/mo. which is only a $50 increase over my last tenant. Basically, rents have been stuck in the $2400-2500 range for three years. My last increase was in 2003, when I got my existing tenant to raise from $2250 to $2400, about 10%. At the original purchase price of $164,000 in 1992, I seem to be making a decent profit, even with the skyrocketing condo fees and property taxes. But as someone pointed out, I think it was you, you have to compare apples to apples. The place is worth somewhere around $600,000 today (down from the peak price in the summer of '05 which I ballpark was around $700,000). A buyer today with 20% down would pay roughly $3200 in principal & interest on a $480,000 mortgage. Add in $450/mo in DC taxes & insurance, the $450/mo. condo fee, a modest $150/mo. in repairs, and that's not even taking into account the opportunity cost of sinking $120k in the downpayment instead of the stock market. Grand total $4250/mo. buy vs. $2450/mo. rent. Even if you snag the first-time DC homebuyer tax credit and the mortgage interest deduction, you come out way behind. And I wouldn't count on appreciation bailing you out. As you probably know, there is a huge glut of DC condos, and I see prices stagnating for 3-5 years.
Doughboy |
