Formula for montly charges vs sales price

Yes.

Figure out how much the mortgage payments would be, then add that to the monthly charges.

Use that and I will just about guarantee you will overpay for the unit.

30yrs is right, as he usually is ;)

The formula you use to compare the two apartments, Slims, is that you buy the one with the lower monthly charges.

Now wasn't that easy? ;)

Seriously, if you like both apartments enough to be asking, and can afford either one, that is your answer.

Here's why I say this. Higher monthly charges, no matter the cause, is money out of the door every month for year after year after year after year after year....

Any tax benefit, even if you're eligible for it and you don't get hit with the alternative minimum tax, doesn't come close to compensating.

When you pay more for the more expensive property with lower charges, you only do it once, and you have a much higher probability of getting that money back when you sell. You do not get the higher maintenance/cc. back.

The other thing that might influence your decision: Have a little chat with a distressed seller sitting in a very nice apartment with monthly charges significantly above the going rate for an apartment of that type/amenities. I've had more than a few of these encounters.

Basically, in this down market, it's not easy to get buyers in to look, much less make offers. In the under $1 mill market I mostly work in, buyers are exquisitely sensitive to monthly payments.

Also, please bear in mind that interest rates are not going to stay this wonderfully low forever. We might get 1-2 more years of these low interest rates, and then they are inevitably going to go up, they have to.

Which means potential buyers of your apartment will be staring at a high mortgage payment PLUS your high monthly charge.

Buying real estate is not like buying a car and assessing the mileage. Whether we like it or not, buying real estate is always an investment.

{Manhattan real estate agent and r.e. investor.}

You need to understand the reason for the difference in monthlies. It could be the size (or lack) of a mortgage on the buildings. It could be that one building keeps things higher to build reserves while the other goes with assessments for every little thing that pops up.

Having said all that, I use between $25k-$30k of price is approx. $100/mo. maint. But I only use that for rough numbers and I'm generally going the other way, trying to compare a high maint. comp to a lower maint. place for sale.