Monthly 'hidden' costs of a brownstone
We are thinking of buying a large 3 floor brownstone (probably with top floor rental) and we are trying to figure out how much extra we would need to pay per month on top of mortgage. We have always been renters and have no idea of actual costs for a large house (insurance, taxes, heating, electricity etc). Can anyone share their experience? Thanks!
ajeb
in Utilities 13 years and 2 months ago
10
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10 replies
bobjohn | 13 years and 1 month ago
if you are looking at accuratly calculate NPV, you should consider a few more factors in addition to what others said: – rentes will not always pay rent. usually people factor 75% of the rent – interest on your mortgage is tax deductable. – tax on your house will go up little by little. – you need to include minor maintanance costs (pay someone to trim trees, to showel snow, to repaint roof and rewaterproof deck, service contract with heating company, etc).
sunbury | 13 years and 1 month ago
Definitely have 10K for emergeny repairs. Shortly after I moved in, I need to fix a cracked sewer pipe in front garden. It cost 8K. Roof repairs as we know are very important and I skimped on that at the beginning, I know that I will need to replace roof in the next year. Other than that, 2 family with top floor tenants is about, water bill around 700, gas for heating/cooking (tenants pay their own) averages 1120 per year (I had new double glazed windows installed 2 years ago), this has made a considerable difference, and is well worth the investment. Homeowners’ insurance policy is around 1,600 with Liberty Mutual. It is well worth get low flow toilets, showers, because water bill can run quite high, if not monitored. Energy bulbs are good. Just think green, it will work out in the long run. I would recommend getting the major jobs done, one at time, by a professional, this will save you money in the long run. I am sure some of us have learnt our lesson, the hard way, in that we end up paying twice for the same job.
snowman2 | 13 years and 1 month ago
If the house currently does not have a top floor rental then you will either be renting it illegally or changing the c of o. The c of o change is an expense but there should not be much expensive renovation to go from a 1 family to a 2 family. Schnall (on Atlantic Ave I think) does a lot of conversions.
daveinbedstuy | 13 years and 1 month ago
Installing a kitchen would be added to the cost basis and amortized over 20+ years. Painting and other “repairs” would be deductible yearly, as would be 1/3 (if it’s one floor in a three storey building) of mortgage interest, common charge gas and electric (heating and hot water), water bill and insurance. I’d say anything more than $1,000 a month in rent is definitely worth it. Screen your tenant cabdidates well. get credit report, income tax returns, employer letter, etc.
ajeb | 13 years and 1 month ago
Thanks for all your comments, they are all very useful! Another question about having a rental and whether it’s worth doing it… I understand this is seen as extra income and should be reported on tax returns. Unless it is a high end rental, is it worth it? But then the initial cost of installing a kitchen, paint job etc should be deductable?
slopegirl | 13 years and 1 month ago
you definitely do want a cash reserve and plan on something going into reserve fund every month to replenish what you spend on repairs. water and sewer will depend on how many people live in the building, but we pay about $100/month for 8 people so yours will be less than that. big expenses are roof, furnace/boiler and any leaks. I’ve lived for 15+ years in old buildings and I feel like every time there is a leak it costs $1000 to $2000 (plumber and then fixing the walls when plumber leaves). I’d say in an old building there’s probably a leak that big every 3-5 years. Last leak we had was a window not a pipe so that was only $400 to replace the window. We have an old shabby house with a good roof and we spend about $10,000 a year too… this year it was a new furnace, last year we repaired and repointed the back wall and repainted fire escape. Year before that it was the chimney. I think in smaller building it would be less but the condition of the building obviously a huge factor. Still, I think it’s smart to plan to spend real $$ every year on upkeep. Some years may be quieter but hot water heaters only last 10 years, roofs age, plumbing, windows decay (if you have crappy vinyl ones like we do anyway) etc etc.
callalily | 13 years and 1 month ago
Top floor tenants are fine, relax. Fixed costs on top of the mortgage are insurance, water/garbage, and heat. We pay about $3,600 for a three-story plus cellar house for heat and hot water combined. We have an oil burner with hot water radiators, and our house is as leaky as can be imagined. Set aside about $10,000 set aside for emergency repairs. We’ve been spending about $1,000 a month for the past two years on necessary repairs such as chimney, plumbing, extermination, and structural. However, our situation is unusual (or rather, not really unusual for the underfunded, but avoidable). If you buy a place in “move-in condition” or renovate in advance with an architect and licensed contractor who know what they are doing, your expenses should be in line with Dave’s.
bowl-of-dicks | 13 years and 1 month ago
You really don’t want top floor tenants!
needmtg | 13 years and 1 month ago
When I calculated the equivalent of a co-op monthly charge on my 4-story 2-fam house, it wound up being 1,500/month on a 30 year cycle…including a roof replacement, boiler, etc. once in that period, w/h every 12 years, etc. all utilities, taxes and insurance, and $2000/yr for contingencies. Maybe a little conversative (high) but a starting point. Of course, you’re not paying out that much every month… but for me it’s still about $1000/month+mortgage.
daveinbedstuy | 13 years and 1 month ago
Actually, they will be hidden until you get there and experience them. Insurance and taxes will of course be fixed. My insurance ran $1,700 a year through State Farm. I have a three floor brownstone with tenants in the basement. Water was $700 but I was away a lot (2 tenants). I have gas forced air and a gas hot water heater. My gas bill ran under $1,900 for both of those for the entire year BUT I have extremely energy efficient double pane insulated windows that don’t leak around the edges and I had insulation blown into the cockloft space above the top floor ceiling ($2,400 in 2008). Oil will cost you a LOT more, The only other expense I had was a new roof ($6,500 from Leakmasters) and I knew I would need that when I bought the place. The house had all new plumbing and electric.