With the emergence of graphene and other two-dimensional (2D) materials, transition metal dichalcogenides have been intensely investigated as potential 2D materials using experimental and theoretical methods. VSe2 is an especially interesting material since its bulk modification exhibits a charge density wave (CDW), the CDW is retained even for few-layer nanosheets, and monolayers of VSe2 are predicted to be ferromagnetic. In this work, we show that electron correlation has a profound effect on the magnetic properties and dynamic stability of VSe2 monolayers and bilayers. Including a Hubbard-U term in the DFT calculations strongly affects the magnetocrystalline anisotropy in the 1T-VSe2 structure, while leaving the 2H-polytype virtually unchanged. This demonstrates the importance of electronic correlations for the electrical and magnetic properties of 1T-VSe2. The Hubbard-U term changes the dynamic stability and the presence of imaginary modes of ferromagnetic 1T-VSe2 while affecting only the amplitudes in the non-magnetic phase. The Fermi surface of non-magnetic of 1T-VSe2 allows for nesting along the CDW vector, but plays no role in ferromagnetic 1T-VSe2. Following the eigenvectors of the soft modes in non-magnetic 1T-VSe2 monolayers yields a CDW structure with a 4×4 supercell and Peierls-type distortion in the atomic positions and electronic structure. The magnetic order indicates the potential for spin density wave structures.