Maintenance for this apartment is only $1,006/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 2010, 85% of the maintenance was tax deductable (19% for mortgage interest and 66% for real estate taxes, 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. The table below conservatively uses $1,300 for the analysis (I left the deductable at 85% even though buildings with higher maint. usually spend more on non-deductable items).  The tax benefit estimates the monthly cost based on the amount of maintenance and mortgage interest you can deduct on your income taxes.

Compare the net Monthly cost at the bottom of this sheet to renting an apartment- if you are paying more than $2,675/month in rent, owning this apartment is a better deal.

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 $575k with a maintenance of $1,300.  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!