I can’t imagine a lower home ownership cost than my 350 sqft studio in Portland. It’s an old building but it was renovated. I bought it for $140k and the HOA takes care of pretty much everything.

And yet, I have decent ongoing monthly home ownership costs. Here are my monthly costs for home ownership.

In summary, my home ownership expenses are $717/month or $8,604/year even though I don’t have a mortgage. Ownership saves me money on rent but it comes with its own baggage, giving ownership a loose definition.

In this previous post I detailed my 2017 housing expenses.

1. Property Insurance – $17

I pay the least amount though I could get higher coverage. It comes out to around $200/year.

The biggest issue in these older buildings is flooding due to older pipes. Every couple of years a few units get taken out by rogue water attacks.

2. Property Taxes – $176

Some of this used to be tax deductible. With new tax law changes, not so much.

Having a home office can be a good way to write a small portion off. But property taxes have increased quite a bit in my area which has outpaced inflation.

3. HOA – $293

My monthly HOA dues started out at $160/month and in less than 3 years they are nearly double at $293. I wish my salary would go up that quickly.

HOA covers quite a bit so there are some advantages to having an HOA. But, the more it covers, the more expensive it will likely be.

4. WiFi – $53

Can you have a home without WiFi? I’m not sure. But it’s a cost that I can’t ignore when it comes to home ownership.

I started out at $24/month and it went up as high as $70 and I have recently brought it down a little.

5. Electricity – $26

The only utility payments I’m responsible for is electricity. It’s about $18/month when I don’t have to use the heater and when I don’t cook too much.

In the winter months my electricity payments go up to $50/month.

6. Repairs/Maintenance – $85

I’ve only owned my condo for 3 years and so far I would say my average monthly maintenance cost comes out to $85. This includes fixing a leaking faucet, painting, repairing appliances, etc.

I suspect this number is conservative and it would average out to more over a longer time horizon of home ownership.

7. Special Assessment – $67

When you own a condominium you have special assessments. It’s the same thing as when you have to replace your plumbing or your roof. It’s a bolused expense that was sort of anticipated but you didn’t know when it would be incurred.

Every couple of years each unit gets an assessment of $1,000-$3,000. At least that’s how it’s been historically.

Total = $717/month

What’s interesting about this ongoing monthly cost is that it’s my carrying cost even though I own the property outright.

Imagine if this was a house and not a tiny condo. My carrying costs would be far higher.

Imagine I had a mortgage with an interest rate and mortgage origination fees.

Just to “own” this property I have to pay a 6% annual fee – similar to the expense ratio of an investment.

Why 6%? I bought the place for $140k and ($717*12)=$8,600 which is 6% of my home, year after year.

If I were to rent instead, my monthly payments would be closer to $1,100. But I would also have that $140k at my disposal to invest. I would have no repair expenses or the risk of ownership.