Apartment Vs. Condo

It’s November and I’m not thinking about packing up boxes and trying to move and find a new apartment… Another perk of homeownership =)

Looking at my spreadsheet for the year, and assuming that next month my homeownership costs will be identical to this month, I will have spent $14,480.98 on housing and homeownership costs for all of 2010. This includes Mortgage interest, principle on my loan, additional principle, taxes, MIP, HOA, Earthquake Insurance, Home owners Insurance, and the electrician I had to pay to fix one of my faulty outlets. Monthly, that works out to about $1,206.75| without my additional principle payments, the amount drops to $1,123.68 | & if I take out all the principle I’ve paid down, $981.44

To rent the place I would have rented if I hadn’t bought a condo, (a one bedroom in the complex I lived in before I purchased my casa) would have come out to $14,537.00 for the year, or $1,211.41 a month. So for my first year as a homeowner, it was definitely cheaper to live in my condo, even before I consider the principle and the tax breaks I’ll get from itemizing (Not including start up costs—I’m still in the hole on my place if I were to sell now).

So, I wondered what apartments where going for now in that same complex… and to my surprise, I can still rent a place for the same money I used in my original estimate. $1095 + utilities... but this time most of the initial start up costs wouldn’t be there because I wouldn’t be changing units, so it’s time to recalculate as I look at year two of homeownership.

Apartment:
Rent: $1,095 monthly
Trash: $15 every 2 months
Water: approx $30 monthly
Gas: $25 monthly
Laundry $15 monthly
Renters Insurance $11.00 monthly

= $1,183.50 or $14,202.00 a year (I wouldn’t have a security deposit to pay)

Condo:
Principle, Interest, MIP, Taxes: $808.18
HOA: $250.00
Earthquake: $21.75
Homeowners: $26.84

=$1,106.77 or 13281.24 a year

So even if I pay around $80.00 a month in extra principle payments, it’s still about the same as it would be if I rented the apartment… before tax deductions and write offs!!!! My condo was a smart move for me personally, because I was finished with roommates and moving.

Now, I just need to get to my “breakeven point” to see the happy profit. Since all the monthly expenses are a wash, everything I pay down, regular principle and additional principle can go towards my bottom line since I’d be paying more to rent then I do to own.