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How much does your home cost???
Old 07-26-2006, 11:17 AM   #1
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How much does your home cost???

This is a curiosity question... I have read a few of you talk about your homes etc.. and someone was talking about living in NY cheaply.. but I do not think that a small apartment is the same as a nice house.. just me...

SO, I thought... how much per day are you spending to live in your house This would include the opportunity cost of the equity in your house at say 5%.... so, I put all my expenses... electric, gas, phone, water, insurance, TAXES, average repairs per year along with the opportunity cost and house payment... all expenses...

My cost per DAY is $48.03...

My cost per sq. ft. per day is 2.134 cents...

So, who is cheaper... or who is spending the most!!
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Re: How much does your home cost???
Old 07-26-2006, 02:52 PM   #2
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Re: How much does your home cost???

$31.45 per day for an 1807 sf house
$0.017 per sf per day

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Re: How much does your home cost???
Old 07-26-2006, 02:58 PM   #3
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Re: How much does your home cost???

Quote:
Originally Posted by Texas Proud
This would include the opportunity cost of the equity in your house at say 5%....
I just calculated this part, and I got depressed, so I don't want to play.

You guys should include owner's equivalent rent if you want a picture of the true cost. Basically, you're giving up rental income by living in that house (and you'd need to pay rent if you didn't own the house).
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Re: How much does your home cost???
Old 07-26-2006, 03:01 PM   #4
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Re: How much does your home cost???

$48.66/day
$.048/day/square foot
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Re: How much does your home cost???
Old 07-26-2006, 03:03 PM   #5
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Re: How much does your home cost???

Quote:
Originally Posted by wab
I just calculated this part, and I got depressed, so I don't want to play.
Me too. I think I will start thinking about it in terms of the $135K we paid 25 years ago.
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Re: How much does your home cost???
Old 07-26-2006, 03:09 PM   #6
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Re: How much does your home cost???

if I rented what I live in at $1200/month assumed market rate plus most utilities:

$44.75 per day
$0.025 per sf per day

I also wanted to mention that my earlier calculations excluded the portion of my mortgage payment that pays down principal. (I know, here goes the debate as to what you include in "cost" of owning a home... ).
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Re: How much does your home cost???
Old 07-26-2006, 03:17 PM   #7
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Re: How much does your home cost???

47.95 a day. .025 per sf per day.

But I know that my monthly cost (including mortgage interest but not principal) is less than it would cost me to rent the equivalent, here in the land of high rents.
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Re: How much does your home cost???
Old 07-26-2006, 03:31 PM   #8
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Re: How much does your home cost???

With the year to year increase in my equity of over 20% I don't think the calculation of 5% cost of keeping equity out of the market is a relevant item unless you balance it against the gain in equity since you purchased the house. *In my case the % gain in 3.5 years is 35%. *Which far out earns a market rate of 5% per year as proposed.

If I include the opp. cost of my equity per year minus the gain in equity per year I get the following:

Cost per sq. ft. is a minus $4.03
Cost per day is a minus * *$66.30

So, with this calculation I am making money living there. *
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Re: How much does your home cost???
Old 07-26-2006, 04:04 PM   #9
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Re: How much does your home cost???

Quote:
Originally Posted by Texas Proud
SO, I thought... how much per day are you spending to live in your house This would include the opportunity cost of the equity in your house at say 5%....* so, I put all my expenses... electric, gas, phone, water, insurance, TAXES, average repairs per year along with the opportunity cost and house payment... all expenses...
Using your suggested formula I come up with:

$61/day
2.5c/day/sqft

But I don't know why you want to include utilities (elec, gas, phone, water) into the equation.* Those are dependent on the tenants, not on the house.

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Re: How much does your home cost???
Old 07-26-2006, 04:44 PM   #10
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Re: How much does your home cost???

Around $50/day?

Including two extra mortgage payments/yr, and not including the tax break.
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Re: How much does your home cost???
Old 07-26-2006, 05:14 PM   #11
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Re: How much does your home cost???

Yikes!, at 5%, and only including property taxes, insurance and minor maintenance costs its costing me $249.31/day to live here!

The good news is however, that every four years that cost drops down to $248.63 per day...
for leap year...

If I use my cost basis instead of current value, then its only costing me $97/day...all not including electric, heat, etc..
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Re: How much does your home cost???
Old 07-26-2006, 06:15 PM   #12
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Re: How much does your home cost???

Yikes is right! Due to SoCal's inflated market, 5% of the house that we have owned since 1999 is a TON! Additionally, this calculation penalizes people who have a 15 year loan. If I rationalize taking out the 5% equity cost since it would cost about that much to rent a house then our numbers are around:

$67/day including P&I (mostly P now) + taxes + utilities + minor maintenance
0.05/day/sf (1300 sq SFR)

Our taxes are only 3k a year so that helps a bit, but it still seems quite high.
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Re: How much does your home cost???
Old 07-26-2006, 06:20 PM   #13
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Re: How much does your home cost???

OK... here is the reasoning for some of this...

I used 5% since it is a MM rate... I did not want to get involved with who could make more money investing in whatever..

You can not put in GAIN... your house has a value today... yes, for some it will go up a lot or has gone up a lot, for others (like me) not much at all.. *

I agree, you can exclude the P part of your monthly payment...

I think that the cost for the coasts will be pretty high.. *especially NY and SF..
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Re: How much does your home cost???
Old 07-27-2006, 01:05 AM   #14
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Re: How much does your home cost???

Okay. By your rules . . .

$52 per day
$0.022 per sq ft per day

But don't you need a more complex formula that considers acreage?
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Re: How much does your home cost???
Old 07-27-2006, 09:15 AM   #15
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Re: How much does your home cost???

Ok, using your requested formula of:

5% of the equity put in the house at the time of purchase. This excludes any appreciation since the original purchase. The 5% is for only a one year time peridod.

Add in annual utilities---gas, electric, phone, sewer, water

Add in annual premium for home owners insurance and any additional Umbrella policies.

Add in annual mortgage interest payments.

My result is:

$111.78/day
$6.80 per sq. ft.
$0.018 per sq. ft. per day


I have a lot of initial equity since I put down almost 50% when I bought the house. This inflates my daily cost due to higher "opportunity costs" on the large amount of equity in the house.

The above assumes it is day one after the purchase of the home. There is no additional equity added in due to mortgage payments and no consideration of appreciation or depreciation on the value of the home. The number has very little real value several years after the initial purchase or when a home is paid off.
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Re: How much does your home cost???
Old 07-27-2006, 11:10 AM   #16
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Re: How much does your home cost???

Quote:
Originally Posted by SteveR
5% of the equity put in the house at the time of purchase.* This excludes any appreciation since the original purchase.* The 5% is for only a one year time peridod.

The above assumes it is day one after the purchase of the home.* There is no additional equity added in due to mortgage payments and no consideration of appreciation or depreciation on the value of the home.* The number has very little real value several years after the initial purchase or when a home is paid off.*
Thanks... but I do not remember saying not to include appreciation in your value of your house... if that is what came across I am sorry...

What I was trying to say is you can not use the appreciation on the house in the last year to have a negative expense.. you should use your current equity as the basis for opportunity costs.
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Re: How much does your home cost???
Old 07-27-2006, 11:22 AM   #17
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Re: How much does your home cost???

Dinging the coasters for high costs without measuring back in the high annual gains does make for a bit of a lopsided equation.

My numbers are high, but i'm making $50k+ a year in appreciation.
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Re: How much does your home cost???
Old 07-27-2006, 11:31 AM   #18
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Re: How much does your home cost???

Quote:
Originally Posted by Cute Fuzzy Bunny
Dinging the coasters for high costs without measuring back in the high annual gains does make for a bit of a lopsided equation.

My numbers are high, but i'm making $50k+ a year in appreciation.

For how many years have you made this?? And how many more??

And yes, the coasters will be a lot higher... but then again, they are high cost areas, are they not And are you not giving up opportunity cost to live on the coast? It is a real cost.
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Re: How much does your home cost???
Old 07-27-2006, 11:42 AM   #19
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Re: How much does your home cost???

Years: 12.

How many more: Dont know.

What is your definition of "opportunity cost"? Not having the money invested in something else? Cant see anything else thats given me the same return, and since I use the home as my 'ballast' instead of bonds, my nearly all equity portfolio is doing far better than if I used that 'opportunity' money in stock/bond investments, which would force me to take on more bonds/cash to maintain balance...at a far lower return than what I'm getting.

This is so wildly different based on person, type of housing, region, quality and quantity of home, land, local features, etc.

Nice exercise, and interesting to consider as such...but...
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Re: How much does your home cost???
Old 07-27-2006, 11:47 AM   #20
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Re: How much does your home cost???

If I compare my property, to others sold recently or currently on the market, my property has appreciated $150-$200K per year for 6 years...no way I expect that to continue.
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