Bought in 1984 for $98K...now worth $500K but with a dreaded $1300 maintenance! What to do??? ADVICE!!!

Do you want to stay? Do you like the apartment for your own use?

Cash out -- hit the bid and thank your apartment for the free money.

You can rent for not much more than that and invest your money.

EJO16,

Just curious, how much was the maintaince when you bought in 1984? Any idea how it just escalated this high?

The theme question is this : is it worth it for someone to pay 500k to avoid incurring the monthly cost of rent - monthly charges?......If the answer ain't clear, sell.

The answer is: It is not worth $500k if maintenance is $1300/month. What it was purchased for in 1984 is irrelevant.

How many sq ft?

Asking $500K. Buyer with 20% down is coughing up month maint+mortgage plus losing 3-4% opportunity cost on $100K so a buyer is looking at close to a $4500/mo financial hit. There are lots of apartments for rent on the UES in the $4000-$4500 price range so it may be a hard sell. If you have a legit bid at $500K I would advise you to take it, sell, park the cash in long bonds for the next year or two, rent for close to (+/- $1K) the interest on the $500K then buy something bigger in a year or two. As the saying goes, "bulls and bears make money, pigs get slaughtered". If you can rent the place out for the next 5 years, keep it, rent it. Otherwise make your move now before the banks announce more write downs and the situation gets worse.

I can get to your $1300 maint in 25 years if I use a 4% annual compounded rate from an initial $500 maint. Assuming 35% deductible you spent $170K in maint to make $400K on an investment of $9800 earning a net of $231K over 25 years which is 13.5% annually compounded which beats Madoff's fake 12% as well as most other investments. As Hal Holbrook said in "Wall Street" you're having a good run kid. Enjoy it while it lasts. They never do." Unless you can rent the place for the next 5 years without coop board hassles, sell now take your money off the table and put it to work in the upcoming days of C.R.E.A.M. (Cash Rules Everything Around Me).

the investment has returned about 6.7% annualized. About what you would expect. No great shakes. No idea what your rental alternative may have been over that time time period. I do know that the early 80's was the golden period for U.S. Treasury investing. Double digit yields for 30 year bonds, callable after 25, yea, those were the days. Also, no state income tax, only federal.

patient09, did I do the math wrong? $9.8K to $231K is not 13.5% annually compounded over 25 years? Should I have deducted the portion of mortgage interest not deductible?

He only did 98k to 400k = 6.7%

Hmm... I have some money on the sidelines in my brokerage account & ing direct mm. What would you guys suggest in terms of a better place to park cash - TIPS mutual funds, corporate bond funds?

patient09/cresent22, I see how you calculated the return. You based it off the value of the apartment. It's a better return if he's leveraged but he pays for the use of leverage which I didn't account for. So the truth lies somewhere in between. I need to adjust my calc for the cost of money. You need to account for leverage.

just based on the terminology of the original post, I was trying to keep it as simple as possible. And also highlight the time value of money, making a bunch over 25 years isn't always as sexy as it seems.

Bought in '84? I call bullshit.
I bet you were in elementary school in 1984.

This being just another bullshit posting