Why some Charlottesville condos are risky

I saw in craigslist today an ad offering a condo for rent in a condo conversion in the City. The owner is asking $1200/month for the 2 bedroom unit. The least expensive two bedroom unit in the MLS is asking $169,900. Basic mortgage math says that the PITI payment for that condo, assuming 30-year amortization and 5% down, 6.5% interest rate says that the mortgage payment, would be just under that $1200 threshold (not including the condo fees). So … when one can rent a similar unit for about the same price as purchasing it – is that still a good buy?

** I am not going to link the condo conversion as I don’t want to be accused of raising a ruckus about any particular development; I may sell one of them one day. 🙂 You may search all of the CharlAlbemarle condos here.

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  1. Joshua Dorkin March 19, 2007 at 13:59

    Jim – You make a great point, however, remember that not everyone can or wants to own (why they wouldn’t want to own I don’t know). That said, there are a lot of risky investments out there. People really need to educate themselves before jumping into a piece of property.

  2. Jim Duncan March 19, 2007 at 14:07

    Joshua –

    Absolutely. I have told several clients to wait and rent when they are more comfortable with the market and/or more comfortable with their finances.

    For some, however, if they can rent the same place for $900 versus a mortgage of $1200 (which I have seen in this market), renting may be a much better option.

    One reason that many choose to rent rather than buy here is that Charlottesville has become a fairly transient town for variety of reasons.

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