Each November I look at the old apartment complex that I used to live in and I find out what a one bedroom unit would rent for had I not purchased my home. This gives me my bench mark for what I would be paying each month as a renter and I can see if it was smart to buy when I did despite the housing market and its current ups and downs. To be honest, if I didn't buy when I did, I'd be living in a one bedroom apartment in that complex right now so I think its the best comps I can use.My old apartment complex is also pretty much an equal commute to my work and while the apartment is smaller in terms of square footage, it makes that up in the fact that it has a single car garage so we could store a few boxes in there.
If you remember from last year, SCB and I theoretically "moved" into a slightly bigger one bedroom unit with the "help" of our friends (read no moving costs) that matched our condo's square footage a bit better since our home is 753 square feet and the apartment would be 672 square feet. For 2013, we will assume that we will stay in that unit and not move to insure our security deposit of $400 would be returned (a deal that they have if you stay in the same unit for at least 2 years).
Last year that unit rented for $1,225.00 a month... This year its going for $1,240.00. They have another identical unit with the same floor plan renting for $1,290.00 in a better location, but since they also offer a slightly larger one bedroom with 719 square feet for the same price in a poorer location, we will go with the $1,240.00 rental price.
We will also assume the washer and dryer we hypothetically purchased last year are still happily functioning so we can remove that from our expenses since they would have been paid off from that zero percent loan I would have qualified for.
Costs Associated with Apartment for 2013
FYI- I don't include electric bills since i'd have to pay for those at either place, but my HOA fee includes water, gas, and trash so i'll account for them here using the fees I used to pay 2+ years ago) Monthly: $1,361.00, Annually: $16,332.00
- Trash: $15 a month
- Water: $60 a month
- Gas: $35 a month
- Rent: $1,240.00 a month
- Renters Insurance: $11.00 a month
If we add additional principle to the loan, we count it as an expense at the end of the year and subtract it from what we saved by renting because we benefit from it in added equity. Additionally, we also track any expense we wouldn't have in an apartment and count it against the amount we "save" by not renting. If it's a large expense (like our new windows last year), instead of deducting it from the amount we save here, i add it in as a cost so I remember the amount we paid and its automatically added the "amount we are in the hole" so it does get factored in and eventually wipes out any savings we had from renting. Monthly: $1,065.36| Annually: $12,784.32
- Mortgage: $650.64
- MIP: $50.31 a month
- HOA: $262.50 a month
- Property Taxes: $101.91 a month
Making my condo $295.64 cheaper a month, or $3,547.68 cheaper a year to own.
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