Good Deal or Not? “this coop is over 930 sq. ft.” edition

DC8320625 - Exterior (Front)

This unit is located at 4000 Cathedral Avenue, Northwest. The listing says:

“Enjoy serene living in the heart of the city, in this fantastic 1bd/ 1ba. at The Westchester. Flooded in natural light, with sweeping views above the treetops, this coop is over 930 sq. ft. It is perfect blend of classic charm and modern convenience- the updated fully equipped kitchen featuring top-notch appliances includes a washer/dryer combo! 4 large closets, hardwood floors, high ceilings ..”

You can see more photos here.

This 1 bed/1 bath is going for $296,000 ($1,040 monthly fee.)

36 Comment

  • “1040 monthly fee”

    • It’s a co-op.

    • It’s like buying a unit AND paying rent!

      • no, its not like paying a mortgage and rent. generally all of your utilities (including cable and internet), taxes, and insurance are included in that fee, which adds to the other amenities you are paying for to live in a managed building. sometimes the building will have an underlying mortgage which could also add to the fee. overall, though, I’m not sure if this is a great deal. I love the kitchen, but 930 sq ft. could easily fit a second bedroom!

    • It has a lot of amenities–grocery store, dining room (with room service), guest suites, barber shop/hair salon, library, parking. Honestly it reminds me of my grandfather’s independent living home

  • CoOps are for commies 😀

  • I’m confused, though – I always thought that this place was a retirement community. Maybe it used to be? My best friend actually had her wedding reception in that dining room about 20 years ago – beautiful pictures in that garden and around the fountain. Sadly, her husband passed away from cancer six months ago.

    • Since most coops are generally older than condos (you don’t see too many new coops popping up, aside from some lower-income ones), it makes sense that the overall demographics would skew older, particularly in this part of town.

  • super nice place. I have a friend who lives in an identical unit. It’s spacious, comfortable, and in a nice area. The fee is high, but they usually are for co-ops.

    • The fee is high because it includes your property taxes. So it’s not apples to apples with a condo fee.

  • Does the 1040 monthly fee include the haircut, grocery store and dining hall?

  • Does the 1040 monthly fee include the haircut, grocery store and dining hall?

  • Fees are not usually high for coops. In fact they are comparable to condos when you account property taxes, which coop fees include.

  • “In the heart of the city” has lost all meaning.

    • I disagree that this is “in the heart of the city” at this point. It’s all relative. Not all too much going on over in that part of town these days. I think there are many more desirable locations than Cathedral Heights for a 1br apartment in this price range (accounting for the high coop fee).

  • justinbc

    I expected a lot more in that kitchen when I read “top-notch appliances”.

  • Hmm…let’s see, I live in a place that is 860 sq ft plus a parking spot. My condo fee is $175, taxes $130, cable/internet $65, elec about $100/mo on average. That’s all well less than half what the coop fee is. As for the other “amenities,” who cares? Now, if you had a disco, pub, and spa, that might be different.

    • You also need to include the taxes and interest that are probably rolled in to your mortgage payment.

    • You must be a long term owner or live in a very cheap neighborhood or perhaps West Virginia. For a prime DC neighborhood: Most one bedrooms have condo fees in the mid 200s and some over 300. If you pay 175, you’re probably head for assessments. Property taxes–maybe 200 or more a month. Parking —now as much as 250. Heat–depends on the fuel. You get the picture.

      Most likely there is an underlying mortgage that has paid for improvements and it’s probably a big one. As that gets paid down, your equity increases. That’s why this is unit that would bring 350-400K in a condo building given the square footage and amenities.

      • Bldg is in Parkview, just a few years old, small and self managed. I got a great deal on the place in 2010 when the market was low as well as rates. And because the unit appreciated in value so fast, I got to refinance at 2.1%, dropped the PMI, and now my mortgage is about $950. Extra bonus is that I rent out the parking space for $175 a month.

  • How much of the monthly “fee” is deductible on your taxes?

    • Last I checked, condo fees aren’t tax deductible. But question for Hilltopper…sounds like you live in a new building? My condo fees are $315 and include everything but cable and internet.

      • If there’s an underlying mortgage, would your share of the interest for the underlying mortgage be deductible (similar to the mortgage interest deduction for your own apartment)?

  • Better check out the scaffolding on the roof – why is it there? I was on that roof (there is no roof deck, just a plain roof without resident access) pre-earthquake and there was no scaffolding then…and this is close to the earthquake-damaged National Cathedral.

  • Because it’s shares in a corporation, it’s your share of the underlying mortgage and the building’s property taxes.

    there needs to be an FAQ for co-ops here.

    • +1
      I’d love it if a real estate professional wrote up an FAQ on co-ops for the PoPville community, including what’s included in a fee, tax implications (what can be deducted?), implications of ownership structure, issues surrounding underlying mortgages and co-op cash flows, etc.
      It might be helpful to do a case study of different properties to compare/contrast market practices between condos and co-ops.

      • I’m not a real estate professional, but i have owned a coop unit for 7+ years.

        Similar to condo fees, a coop fee can include trash, snow removal, cleaning and maintenance of common spaces, landscape, etc. Coop fees may also include utilities. This part of your coop fee is not tax deductible. There is no inherent reason that this part of a coop fee would be more or less than a comparable condo fee.

        Unlike condo fees, coop fees include your property tax. This is tax deductible.

        Unlike condo fees, coop fees may include payments for an underlying mortgage for the building. The interest payments for this underlying mortgage are tax deductible.

        When you buy a unit in a coop with an underlying mortgage, you are also assuming your share of the underlying mortgage. This is often deducted from the list price of the unit. So if you see a coop unit listed for sale at $120k, but it has an underlying mortgage of $20k, you would only have to finance $100k. So you essentially have 2 mortgages, but are building equity on both and deducting interest for both.

        But let me back up and explain what an underlying mortgage is. It’s a mortgage that the cooperative corporation takes out on the building as a whole. The ability of the building to take out loans is a major difference between coops and condos. Condos, as I understand it, need to levy special assessments on owners to raise money for large capital expenses (say, a new roof). A coop can take out a loan and finance the cost of that capital expense over years. So coop owners may see a slight rise in their monthly coop fee, but they don’t get hit with a large special assessment all at once, and they can deduct interest on the payments.

        • Thanks for the overview. Seems like there’s a lot of tax advantages to a co-op that make them a better option for middle class folks who don’t have the liquidity to absorb large hits, like a high down payment or major assessment fees.
          I’m from NYC and co-ops are NOTORIOUS for having a rigorous process to buy into the building. You need lots of liquid assets in the bank and they pour through all of your financials, often outright rejecting potential buyers. In general, are DC co-ops similarly strict? Or is it a much more relaxed environment here?

          • I’ve only lived in one coop, so I’m less able to speak about DC at large, but yes, coops will look at your financials and you need to demonstrate some stability. From the coop members’ perspective, a new buyer is a new business partner. All owners are in it together, and everyone needs to be able to keep up their part and pay their coop fees. It depends in the coop, though. Mine was very affordable and didnt require people to be rich. Generally buyers needed to be stably employed with a clean rental, credit and criminal record. I’ll bet others may look to see that you have, say, at least a year of coop fees in savings.

            On the flip side, if you are thinking about buying into a coop, you have a chance to take a close look at their financials. Pay attention to owner occupancy, delinquencies, cash reserves and their annual budget. You’re also looking for stability.

            Because of this oversight coops tend to attract people that want to live in the building for a while, and discourage investors that are only seeking rental income. This means selling may take a bit longer than a comparable condo. But my coop was a close, neighborly building during the time I was there.

            Also, because of the different ownership structure, not every corner bank offers coop mortgages. However, I have found this worry to be overblown in DC. There are banks and title companies that specialize in coops, so competitive financing is out there.

          • The DC co-op process is nothing like the NYC process, where they’re really looking at you as a person (even if they say they’re not) and take a VERY detailed look at your finances, with high expectations thereof. In DC, its more akin to a credit and income check and an interview to make sure you’re not a complete psychopath arsonist.

  • the rule is don’t live west of 16th.

Comments are closed.