Carrying Costs - rule of thumb?

[NewToOC_IHB]

I looked for a thread on this and can't find anything. Is there a generally accepted rule of thumb on what carrying costs are for a home?



An article in today's Washington Post said it can be as high as 1 - 1.5% of the homes value a month. That sounded high but then I did the math on the condo I sold last year and between mortgage payment, condo fees, opportunity costs on the equity, taxes, insurance, maintenance, keeping the lights on, etc I got pretty close to 1%.



We know of a pair of owners in Coto that pulled their house off the market and are letting it sit vacant for at least 2 yrs at this point because they can't get their peak 1m+ pricing. We marvelled at how much it had to suck to have that kind of mortgage and/or capital tied up plus all the extra expenses associated with a nice home - gardener, pool maintenance, etc.

 

[Gohabsgo_IHB]

Intesrest : 5% (7% - tax savings of 30%)

Taxes: 1.05%

HOA: 0.4% ($200/month on a $600,000 home)

Mello-Roos: 0.4%

Insurance : 0.2% ($100/month on a $600,000 home)

This adds up to 7.05% annualy or approximately .6% monthly



Then you add the principal you pay (but it somewhat comes back to you), maintenance, bills. I am sure it adds up to 1%.



Hmmm...do you sell now 25% down from peak OR you wait 2 years, it costs you 20% in maintenance AND you sell 40% down from peak...tough call!

 

[PadreBrian_IHB]

[quote author="Roo" date=1213862306]Intesrest : 5% (7% - tax savings of 30%)

Taxes: 1.05%

HOA: 0.4% ($200/month on a $600,000 home)

Mello-Roos: 0.4%

Insurance : 0.2% ($100/month on a $600,000 home)

This adds up to 7.05% annualy or approximately .6% monthly



Then you add the principal you pay (but it somewhat comes back to you), maintenance, bills. I am sure it adds up to 1%.



Hmmm...do you sell now 25% down from peak OR you wait 2 years, it costs you 20% in maintenance AND you sell 40% down from peak...tough call!</blockquote>


:lol:

 

[NewToOC_IHB]

Preaching to the choir, Roo. I fixed up my condo real nice - paint and do-it-yourself staging and got $100 over listing (I think a rounding error - I didn't want to question my luck) 10 days after it went on the market. But I know people who held onto their condo in the same area "as an investment" - a few of them sit empty even. Sounds like a really bad investment to me.