Originally Posted by turtleroger
keep in mind the maintenance costs include real estate taxes.
...which should be about 2% in Fort Lee.
Way to figure maintenance is, "true" cost of maintenance for a property should be within a very broad 1-3% range. Let's make the absolute worst case assumption here (which makes high maintenance look not as bad as it really is) and assume 3%. That means true cost of one of those ridiculous-maintenance co-ops is (this is a very simple model, if you're actually considering buying in the short term and comparing properties you should make a better one which takes into account comparisons to renting, real lending costs and rates, assumptions about changes in the underlying value of the property, how long you intend to stay there, etc.) :
sticker price + [(yearly maintenance) - .05 * true cost) / i] = true cost
Today's interest rates are at about 4%, but lets crank i up to 5% because the current rate is ahistorically low and it makes the math easy for this not-entirely-accurate academic exercise. Also, let p = sticker price, c = true cost, and m = maintenance.
p + 20(m-.05c) = c
p + 20m - c = c
p + 20m = 2c
c = .5p + 10m
Cool we now have a (barely ballpark but let's run with it) equation. Let's plug in a generic cheap co-op with terrible maintenance fees; say a 1-bedroom costing 100k and with a 1250 monthly maintenance.
c = .5 * 100,000 + 10*12*1,250 = 250,000
Now, that's not entirely unreasonable for the location -- after all, it will get you a nicer apartment in a nicer location than immediately across the GWB, but, it's still fairly spendy; in our hypothetical example 3/5 of the true cost of the apartment are from the high maintenance fees.