Each unit will have a different cost and would include full ownership of your unit and completely equal shared ownership of all the land and amenities on the property.
I have based the price on two factors:
1) Equal share of the land
2) Prorated share based on worth (square footage mostly but also features) of
each unit
To give you a sense, rents in the area tend to run $800-1000/month for small one-bedrooms and $1100-1200/month for small two-bedrooms.
These numbers were based on a million dollar property. Some numbers will be less for smaller properties, some will be the same. The realtor estimates that closing costs (that's what we pay on the day escrow closes, or thereabouts) will total about $13,000. In calculating these numbers we're assuming a $1 million price tag. Of that $13k, perhaps $7500 will be points on the loan (if the mortgage comes with a point, that's 1%). A point is a one-time cost for the privilege of having a lower interest rate; they are common. The rest of the closing costs include transfer taxes, loan fees, title fees, and a bunch of tiny costs that add up.
During escrow we'll have to get appraisals and reports. The realtor estimates that the basic appraisal will cost $280 for the first house and about $100 for each additional unit.
We would need a well report which the realtor guesses will total about $500. This includes all the basics plus testing the water for a bunch of toxins.
We'll hire a lawyer to help us with the legal contract. I don't know what that will cost but I'm guessing $500 if we do the groundwork ourselves. Maybe $1000, but not more than that.
Many of these costs will be prorated by our own purchase prices (or purchase price minus down payment). Others we'll split evenly.
Estimate $16k for all the closing and purchase costs (I've added some wriggle room). If we divided it evenly, that would be $2700 per unit. But the main house costs will be higher so everyone else's will be lower. I still recommend you budget more for this, just in case. I'm assuming $3-5000 per unit, but with luck that will be a vast overestimation. Sometimes you can finance closing costs along with the rest.
Cost per unit: about $2500, maybe higher
Your monthly mortgage payment will depend on two factors: 1) How much of your purchase price you finance; 2) The interest rate. We'd probably go for the standard 30 year fixed loan (I so do not want a varible-rate loan, they will bite us in the ass in a few years). Chances are we could get 8% or less. 7.5% would be awesome, lower is unlikely.
Here are the amounts you'd pay at different interest rates. The costs are for $100k of financing. Scale up or down as needed.
| Monthly Payment per $100k of financing at various interest rates | |
|---|---|
|
7%
|
$665
|
|
7.5%
|
$699
|
|
8%
|
$734
|
|
8.5%
|
$769
|
|
9%
|
$805
|
A fantastic site is Hugh's Mortgage and Financial Calculators
Property Tax: Property tax in California is 1% of the total purchase price every year. On a million dollar property, that's $10,000. We would prorate this by our share of total purchase price (regardless of how much or how little you put down). So for every $100,000 you paid for your unit, you'd owe $1000/year in property tax. My advice: count this as part of your mortgage and pay into a fund for it monthly (some banks give you this option with your mortgage).
Sewer Tax: Guerneville charges $500 per year per unit. No charge if a unit has a septic tank.
Misc Taxes: The realtor estimates another $500 per year in little charges from the city and county.
Total Property Tax: $13,500/year.
Homeowner's Insurance: We don't know what this will cost. I'm assuming $50/month per unit and the realtor thinks this is in the ballpark.
Cost per $100k of your purchase price: About $150/month
Pest Abatement: If needed, completely nontoxic means (microwaves are one possibility) should be way under $1000.
Flooring: If you need to replace or add flooring, Daliya of Nirvana Safe Haven estimates MCS-safe flooring would cost maybe $3000 for the 750 sf or so. More depending on the type of flooring. We might be able to get discounts.
Misc: Add costs for things like refinishing,, turning windows into doors, adding patios, decorating, etc. And of course your moving costs.
Cost per unit: Zero to several thousand, depending on how much you choose to do and what you can do yourself.
Gardening: For a large property, it takes about 2 hours to mow completely,
about once a week is reasonable. It takes another 2 hours to trim a lot of hedges.
Hardscape only needs sweeping and the occasional weed pulling.
My guess is that every week there would be about
20 hours of work to do. Mowing: 2 hours, clipping: 2 hours, sweeping: 4 hours,
weeding: 4 hours, replacement plants, seedlings, greenhouse, etc: 4 hours, misc:
4 hours. Then add in extra for the vegetable garden, harvesting, etc. The timing
will vary by season but remember in California, a garden is a year-round job.
With 6-10 people, this shouldn't be much work at all. Those of us who love gardening
will do more work (I could easily do 4 hours a week just by myself, and probably
more) and those who don't really care can just be responsible for sweeping around
their units and part of the common areas. Mikel doesn't mind mowing (we own
a cordless electric mulching mower) and doing the compost. Or we could hire
someone to mow and sweep.
Ponds: I haven't a clue. But I can't imagine it averages out to more than 1-2 hours a week (it's probably much less), including feeding the fish. The food can't possibly cost very much.
Pool/spa: We'd have some startup costs to convert to a nontoxic sanitation
system (I'm assuming no one wants to keep the chlorine system). I don't know
what pool maintenance costs but if you hire someone to check the chemical balance
and add chlorine once a week, it is generally $40-50/month (if they have other
clients in the area). We can easily buy ourselves the chemical kit and test
it ourselves and pay someone a couple times a year to do professional cleanings,
check our systems, whatever. Unless one of us has a clue how to do it and is
willing to take on the task and train the rest of us.
The pool is heated with solar panels on the roof
of the main house so we can heat the pool year round without any costs beyond
the small amount of electricity used for the pump.
We'd have to decide if we wanted any extras like
a pool cover or a mini-fence around the pool to keep visiting children safe.
Livestock Area: If we have livestock, they require work, but not that much. Chickens are about 15 minutes twice a day to feed, water, and check on them. Add an hour or two a month to check the enclosures and make repairs. I've checked these numbers out with homesteading lists. I don't know what's involved in caring for goats or sheep. This would be the job of whoever wants the animals and benefits from them.
Common Electrical: I'm not sure how we'll figure it all out but there will be small expenses for outdoor lighting, pool heating pump, outdoor kitchen, water pump, etc. I assume it will be very low.
Misc: Undoubtedly there will be misc expenses, but I can't think of anything major at the moment. Feel free to suggest some.
I propose that in the likely case that we get some income from renting parking space for trailers and etc that we use that money to pay for common expenses like gardening, pool, etc. If we need more money to do what we agree to do, we would split it evenly by unit (since we own the land evenly). If we get more income than we need for common uses, we would split it evenly.
For more information, contact Cyndi Norwitz at cyndi@tikvah.com - Page last modified 6/1/02