Maintenance for this apartment is only $940/month.  This includes the real estate tax, the underlying mortgage on the building, and building common charges (eg. garbage removal, building maintenance and repairs, super, etc…).  Heating and hot water are also included in the maintenance.  In 2008, 63% of the maintenance was tax deductable (this means that 63% of the maintenance cost went to the real estate taxes and the building mortgage, which you can deduct from your income taxes). 

When calculating the monthly cost of an apartment, it is critical to include the maintenance cost as it can dramatically change your monthly housing cost.  Most 2BR’s on the UES have monthly maintenance costs over $1,200, and many over $1,500. I used $1,250 for the analysis below.  The tax benefit estimates the monthly cost based on the amount of maintenance and mortgage interest you can deduct on your income taxes.

This apartment obviously has a lower monthly out-of-pocket and tax adjusted cost than an apartment with the same price and higher maintenance, but what is interesting is that this apartment also has a lower monthly out-of-pocket cost and tax adjusted cost than an apartment priced at $589k with a maintenance of $1,250.  In other words, an apartment costing $60k less than this one, with a higher maintenance will cost you more a month (out-of-pocket and tax adjusted) than this one!