Placing a value on maintenance costs when purchasing coop

It depends on many factors such as interest rates, maint. tax deduction, assumptions about future maint. increases, etc. For the buildings that include cable and/or electric in the maint. I also try to account for that.

I roughly estimated $100/mo maint. ~= $25k purchase price for most of the stuff I was looking at.

satsu - I just did a simple "discounted cash flow" analysis online, and it confirms that looking2return's rule of thumb is reasonable. A $100/month maintenance difference between two identical units, in perpetuity, discounted at 5% = $24k.

The calculation is obviously sensitive to the discount rate you use. A 4% discount rate suggests you should pay $30k, rather than $24k, less for the unit with $100/mo higher maintenance. A 6% discount rate suggests the figure should be only $20k.

These are good analyses of the value given up in the added maintenance, but you really need to figure out where and to whom that value is going. You need to value the relative size of any cash surplus, as well as any mortgage held by the coops. Are the buildings of similar size? Did one do any significant recent repairs/maintenance that may be looming for the other?

thanks. this is helpful. obviously, no 2 apartments are 100% identical but its helpful to have a sense of what maintenance is worth. i've run into so many people (and brokers, unfortunately) who only look at purchase price and largely ignore maintenance.

Lets not also forget what you get for the money. A $2000 maintenance in a building with no amenities vs. a the same # with a pool/gym/play room'doorman/etc.. What are the financials of the building? Are there big maintenance projects on the horizon that will cause changes in you monthly costs. How big is the building...large building absorbe cost with less pain (most of the time). See where I'm going with this? I'd begin with the plan above and then put on your wizard had and try to factor in the rest. It's really not that hard.

The problem is that:
a) it's usually not a linear calculation, and
b) it depends an awful lot if either, both, or neither falls or doesn't fall within what the market "expects" the mtc to be for a such a unit.

For example, if you had 2 one BR units and one had an $1,100 mtc and the other had a $1,600 mtc, I think the difference would be less than if one had a $1,600 mtc and the other a $2,100 mtc.