Making Sense of Storage Condominium Ownership (Whybuy)

Sales or Information - 760-318-1110

Parameters -

For this example, we will use a 13' x 50' garage with a current market rental rate of .80 per sq. foot, or $520 per month.

The purchase side assumes a 25 year loan, with an interest rate of 6.5%, with a 35% down payment and a 25% tax bracket. This also assumes a 5 year time line.

5 Year Rental Cost (Basis)

# Monthly Cost 5 Year Cost
1 $520 $31,200

5 Year Ownership Cost (Basis)

Monthly payment 5 Year Total
Purchase Price $97,500
Down Payment (35%) $34,125
Loan Amount $63,375 $428.00 $25,680
Property Taxes (1.4%) $1,365 $5,118 (%25 Deduction)
HOA Dues $60 $3,600
Total 5 Year Cost to Own $573.30 $34,398

So, the cost to own is slightly higher than renting, but watch what happens when you decide to sell your storage condominium.

Selling at 5 Years, Zero Appreciation

Monthly payment 5 Year Total
Selling Price $97,500
Loan Payoff (originally $63, 375) $55,822
Equity $7,553
Property Taxes Paid 5 Years -$5,118
HOA Dues -$3,600
Total 5 Year Cost to Own $593.01 $35,580
Total 5 Year Cost to Rent $31,200
Savings vs., Rental -$4,380

Selling at 5 Years, 2% Appreciation

Monthly payment 5 Year Total
Selling Price $107,250
Purchase Price $97,500
Loan Payoff (originally $63, 375) $55,822
Equity $17,303
Property Taxes Paid 5 Years -$5,118
HOA Dues -$3,600
Total 5 Year Cost to Own $428 $25,680
Total 5 Year Cost to Rent $31,200
Savings vs., Rental $5,520

Selling at 5 Years, 5% Appreciation

Monthly payment 5 Year Total
Selling Price $121,875
Purchase Price $97,500
Loan Payoff (originally $63, 375) $55,822
Equity $31,928
Property Taxes Paid 5 Years -$5,118
HOA Dues -$3,600
Total 5 Year Cost to Own $41.16 $2,470
Total 5 Year Cost to Rent $31,200
Saving vs., Rental $28,730

Selling at 5 Years, 8% Appreciation

Monthly payment 5 Year Total
Selling Price $136,500
Purchase Price $97,500
Loan Payoff (originally $63, 375) $55,822
Equity $46,553
Property Taxes Paid 5 Years -$5,118
HOA Dues -$3,600
Total 5 Year Cost to Own -$57.28 -$3,437 (Profit)
Total 5 Year Cost to Rent $31,200
Savings vs., Rental -$3,437 (Profit)

So, as you can see, the potential for significantly lower monthly costs are certainly possible. Impossible with rentals. At our Sister project, Eucalyptus at Beaumont, owners there have experienced well over 8% appreciation for the last 5 years. In fact, everyone who has sold their garage, has not paid a penny. While these results are not typical, the simple fact is, it did happen. All garages sold at Eucalyptus at Beaumont have all yielded a profit over and above all costs.