Real Cost of Owning a Home

Category	Monthly Cost	2026 Orlando Context
I. FIXED CARRYING COSTS	$3,259	Mandatory Cash Outflow
Mortgage (P&I)	$2,324	$384k loan @ 6.1% (30-yr fixed).
Property Taxes (Net)	$345	OC Millage (~17.2) minus Homestead Exemption.
Homeowners Insurance	$290	Current market average for pool homes.
HOA Dues	$300	Your specified average.
II. OPERATIONAL EXPENSES	$1,040	Monthly Upkeep & Local Labor
Utilities (Elec/Water/Sewer)	$350	Includes high A/C usage and pool pump power.
Pool Service	$150	Professional cleaning and chemical balancing.
Lawn & Irrigation	$130	Mowing, edging, and sprinkler head repairs.
Pest & Termite Bond	$85	Subterranean bond + quarterly pest spray.
General Maintenance	$325	"1% Rule": filters, paint, and pressure washing.
III. REVISED RESERVES	$262	Capital Savings (Your New Timelines)
Roof Reserve	$125	$22.5k replacement every 15 years.
HVAC Reserve	$71	$14.5k replacement every 17 years.
Pool Resurfacing	$66	$12k resurface every 15 years.
IV. TAX INCENTIVES	(-$62)	Direct Bill Reductions
Homestead Exemption	(-$62)	Direct savings on your OC property tax bill.
Federal Income Tax Benefit	$0	Standard Deduction ($32.2k) > Itemized ($27.4k).
TOTAL TRUE MONTHLY COST	$4,499	Actual All-In Monthly Budget

Realtor · Central Florida-Orlando · Member since 2014 · 1k+ posts · 894 votes

Hey @David Smith First, you and your wife need to define your goals and be on the same page whether owning is the right path and you can swing it based on current and future income, family status (do you have kids now or plan to) and lifestyle.

I do see some issue with your table. Not trying to be harsh, but if this is your first home, do you need a $500k POOL home? Maybe start out more modest in a neighborhood that would eventually make a good rental, so when you start hitting more goals, you can turn it into a rental and 'move up' for your personal home. A pool home in a community that has a $300 HOA is probably not the best choice for a rental.

So for the calculations.

You don't need to put 20% down. Look at grants or programs that could help with that. Right now, many sellers and definately new construction will offer closing cost or rate buy down assistance, so if you can get the seller to pay some of your cloisng costs, use that money to buy down your interest rate and lower your monthly principle.

Insurance, again if you don't have a pool home, could be lower (many other factors)

HOA $290 is a lot, many newer communities include cable/internet and can be in that ballpark, but generally much lower. One of my current listings is in Waterford Lakes (east orlando), 1900sqft pool home, listed at $465,000 and HOA is only $39/month. So I would revisit that number.

Utilities, this could actually be low for summer months, may depend partially on how new (energy efficient) the home is, how many people live in the house and how cool you like it.

Pool, lawn, pest is about right...but maybe do some of this on your own, at least for a year or two and stash away those savings for the greater good.

General maintenance -based on what you included...filters yes, paint and pressure washing is not a monthly expense and again, thats just part of owning a home(IMO), do it yourself and you just have the cost of materials and its certainly not $325/mo

Roof will likely be more in 15 years..unless this venezuelan oil factors into that(?) HVAC could be that high, but that is a big number and I would plan on replacing 8-10 years, not 17. 17 can definatley happen, but likely wont' last near that long. Same with pool, likely more 15 years from now.

Homestead- you already accounted for that in your property taxes near the top

Hope this helps a bit, happy to chat more if you need.

Best of luck!

1 Reply

David Smith
OP
Member since 2018 · 42 posts · 16 votes
10mo
Quote from @Shawn McCormick:

Hey @David Smith First, you and your wife need to define your goals and be on the same page whether owning is the right path and you can swing it based on current and future income, family status (do you have kids now or plan to) and lifestyle.
I do see some issue with your table. Not trying to be harsh, but if this is your first home, do you need a $500k POOL home? Maybe start out more modest in a neighborhood that would eventually make a good rental, so when you start hitting more goals, you can turn it into a rental and 'move up' for your personal home. A pool home in a community that has a $300 HOA is probably not the best choice for a rental.
So for the calculations.
You don't need to put 20% down. Look at grants or programs that could help with that. Right now, many sellers and definately new construction will offer closing cost or rate buy down assistance, so if you can get the seller to pay some of your cloisng costs, use that money to buy down your interest rate and lower your monthly principle.
Insurance, again if you don't have a pool home, could be lower (many other factors)
HOA $290 is a lot, many newer communities include cable/internet and can be in that ballpark, but generally much lower. One of my current listings is in Waterford Lakes (east orlando), 1900sqft pool home, listed at $465,000 and HOA is only $39/month. So I would revisit that number.
Utilities, this could actually be low for summer months, may depend partially on how new (energy efficient) the home is, how many people live in the house and how cool you like it.
Pool, lawn, pest is about right...but maybe do some of this on your own, at least for a year or two and stash away those savings for the greater good.
General maintenance -based on what you included...filters yes, paint and pressure washing is not a monthly expense and again, thats just part of owning a home(IMO), do it yourself and you just have the cost of materials and its certainly not $325/mo
Roof will likely be more in 15 years..unless this venezuelan oil factors into that(?) HVAC could be that high, but that is a big number and I would plan on replacing 8-10 years, not 17. 17 can definatley happen, but likely wont' last near that long. Same with pool, likely more 15 years from now.
Homestead- you already accounted for that in your property taxes near the top
Hope this helps a bit, happy to chat more if you need.
Best of luck!

Shawn, thank you for all the amazing tips. I'll keep this post "bookmarked"
0 Reply

Theresa HarrisPro Member

Member since 2019 · 15k+ posts · 11k+ votes

10mo

For some of those costs, it is about where you decide to buy. Don't buy in an area with HOA, don't get a pool, do your own yardwork-that saves you ~$650 a month (and more because you don't have to maintain a pool).

Owning a home is about more than the monthly costs (which in the long run go down once your mortgage is paid off), it is about being able to do what you want with the home and the security of knowing your landlord can't sell your home from you. In some areas, it is cheaper to rent than buy; but at the same time remember that for many rentals the rent is high enough to cover most of the landlord's costs. For some of the costs (eg replacing a roof or HVAC), it also depends on how old those things are when you buy the home and how long you own the home. If you buy a house with a new roof and live in it for 15 years, hopefully you don't have to deal with replacing a roof.

3 Reply

David Smith
OP
Member since 2018 · 42 posts · 16 votes
10mo
Quote from @Theresa Harris:

For some of those costs, it is about where you decide to buy. Don't buy in an area with HOA, don't get a pool, do your own yardwork-that saves you ~$650 a month (and more because you don't have to maintain a pool).
Owning a home is about more than the monthly costs (which in the long run go down once your mortgage is paid off), it is about being able to do what you want with the home and the security of knowing your landlord can't sell your home from you. In some areas, it is cheaper to rent than buy; but at the same time remember that for many rentals the rent is high enough to cover most of the landlord's costs. For some of the costs (eg replacing a roof or HVAC), it also depends on how old those things are when you buy the home and how long you own the home. If you buy a house with a new roof and live in it for 15 years, hopefully you don't have to deal with replacing a roof.

Very good points, Theresa. The odds of getting a house with a brand new roof and a brand new AC are not very high. I guess it would be good to have a spreadsheet on hand when looking at homes to calculate the costs for replacements and major repairs. Your point about having the security of knowing your landlord can't sell your home from you is really our biggest concern here.
1 Reply

Chris Grenzig

Property Manager · Orlando, FL · Member since 2016 · 479 posts · 277 votes

10mo

Quote from @David Smith:

Hello all,

Historically, I've used BiggerPockets for investing and to meet people at conferences. Now it's finally time to buy our own home. Really, my wife is the real advocate of this endeavor. She wants that feeling of having our own home that we can paint and design however we want, and doesn't want to be at the mercy of a landlord raising the rent. I myself prefer the idea of a home for the same reasons but probably would lean towards renting our home and buying another investment property.

Anyways, I tried calculating the true cost of homeownership in Orlando and it seems absolutely unrealistic. Please pardon my lack of experience in this department but here are the numbers. Gemini helped create this table so it may have some issues.
Assumptions:
Home Purchase Price: 480k
20% downpayment: 96k
Interest rate: 6.1%
HOA monthly: 300

Category	Monthly Cost	2026 Orlando Context
I. FIXED CARRYING COSTS	$3,259	Mandatory Cash Outflow
Mortgage (P&I)	$2,324	$384k loan @ 6.1% (30-yr fixed).
Property Taxes (Net)	$345	OC Millage (~17.2) minus Homestead Exemption.
Homeowners Insurance	$290	Current market average for pool homes.
HOA Dues	$300	Your specified average.
II. OPERATIONAL EXPENSES	$1,040	Monthly Upkeep & Local Labor
Utilities (Elec/Water/Sewer)	$350	Includes high A/C usage and pool pump power.
Pool Service	$150	Professional cleaning and chemical balancing.
Lawn & Irrigation	$130	Mowing, edging, and sprinkler head repairs.
Pest & Termite Bond	$85	Subterranean bond + quarterly pest spray.
General Maintenance	$325	"1% Rule": filters, paint, and pressure washing.
III. REVISED RESERVES	$262	Capital Savings (Your New Timelines)
Roof Reserve	$125	$22.5k replacement every 15 years.
HVAC Reserve	$71	$14.5k replacement every 17 years.
Pool Resurfacing	$66	$12k resurface every 15 years.
IV. TAX INCENTIVES	(-$62)	Direct Bill Reductions
Homestead Exemption	(-$62)	Direct savings on your OC property tax bill.
Federal Income Tax Benefit	$0	Standard Deduction ($32.2k) > Itemized ($27.4k).
TOTAL TRUE MONTHLY COST	$4,499	Actual All-In Monthly Budget

If there is one thing I realized after buying a house, you get way more unexpected costs than you realize. Decorations for the holidays, little fixes, making it nicer, hosting more people over, decor, furniture, grills, garage gym, etc. Those are the things you don't think about, but you want to make your house feel like a home and they can add up quick.

However, one thing I will add, which is not necessarily your intention of the post, which is about costs.

There's something really great about owning where you live and getting to do what you want with it more then renting a place. Our home can be expensive, but I love it and I love getting to call it my own.

I never ever wanted to house hack, even though it could make a lot of financial sense, but I never thought the potential emotional toll on my home life is worth it if things didn't go well. So I have always placed a higher emphasis on my life away from work then maybe just strictly the financial figures. Which I am very much the opposite when looking at strictly investing and investment properties

2 Reply

David Smith

OP

Member since 2018 · 42 posts · 16 votes

10mo

Quote from @Chris Grenzig:

Quote from @David Smith:

Hello all,

Historically, I've used BiggerPockets for investing and to meet people at conferences. Now it's finally time to buy our own home. Really, my wife is the real advocate of this endeavor. She wants that feeling of having our own home that we can paint and design however we want, and doesn't want to be at the mercy of a landlord raising the rent. I myself prefer the idea of a home for the same reasons but probably would lean towards renting our home and buying another investment property.

Anyways, I tried calculating the true cost of homeownership in Orlando and it seems absolutely unrealistic. Please pardon my lack of experience in this department but here are the numbers. Gemini helped create this table so it may have some issues.
Assumptions:
Home Purchase Price: 480k
20% downpayment: 96k
Interest rate: 6.1%
HOA monthly: 300

Category	Monthly Cost	2026 Orlando Context
I. FIXED CARRYING COSTS	$3,259	Mandatory Cash Outflow
Mortgage (P&I)	$2,324	$384k loan @ 6.1% (30-yr fixed).
Property Taxes (Net)	$345	OC Millage (~17.2) minus Homestead Exemption.
Homeowners Insurance	$290	Current market average for pool homes.
HOA Dues	$300	Your specified average.
II. OPERATIONAL EXPENSES	$1,040	Monthly Upkeep & Local Labor
Utilities (Elec/Water/Sewer)	$350	Includes high A/C usage and pool pump power.
Pool Service	$150	Professional cleaning and chemical balancing.
Lawn & Irrigation	$130	Mowing, edging, and sprinkler head repairs.
Pest & Termite Bond	$85	Subterranean bond + quarterly pest spray.
General Maintenance	$325	"1% Rule": filters, paint, and pressure washing.
III. REVISED RESERVES	$262	Capital Savings (Your New Timelines)
Roof Reserve	$125	$22.5k replacement every 15 years.
HVAC Reserve	$71	$14.5k replacement every 17 years.
Pool Resurfacing	$66	$12k resurface every 15 years.
IV. TAX INCENTIVES	(-$62)	Direct Bill Reductions
Homestead Exemption	(-$62)	Direct savings on your OC property tax bill.
Federal Income Tax Benefit	$0	Standard Deduction ($32.2k) > Itemized ($27.4k).
TOTAL TRUE MONTHLY COST	$4,499	Actual All-In Monthly Budget

If there is one thing I realized after buying a house, you get way more unexpected costs than you realize. Decorations for the holidays, little fixes, making it nicer, hosting more people over, decor, furniture, grills, garage gym, etc. Those are the things you don't think about, but you want to make your house feel like a home and they can add up quick.

However, one thing I will add, which is not necessarily your intention of the post, which is about costs.

There's something really great about owning where you live and getting to do what you want with it more then renting a place. Our home can be expensive, but I love it and I love getting to call it my own.

I never ever wanted to house hack, even though it could make a lot of financial sense, but I never thought the potential emotional toll on my home life is worth it if things didn't go well. So I have always placed a higher emphasis on my life away from work then maybe just strictly the financial figures. Which I am very much the opposite when looking at strictly investing and investment properties

I think this is the answer I was secretly hoping to get. Calling something your own has meaning. And if property taxes do actually get eliminated then I will truly own the home. Thank you for your perspective, Chris.

0 Reply

Chris Grenzig

Property Manager · Orlando, FL · Member since 2016 · 479 posts · 277 votes

10mo

Quote from @David Smith:

Quote from @Chris Grenzig:

Quote from @David Smith:

Hello all,

Historically, I've used BiggerPockets for investing and to meet people at conferences. Now it's finally time to buy our own home. Really, my wife is the real advocate of this endeavor. She wants that feeling of having our own home that we can paint and design however we want, and doesn't want to be at the mercy of a landlord raising the rent. I myself prefer the idea of a home for the same reasons but probably would lean towards renting our home and buying another investment property.

Anyways, I tried calculating the true cost of homeownership in Orlando and it seems absolutely unrealistic. Please pardon my lack of experience in this department but here are the numbers. Gemini helped create this table so it may have some issues.
Assumptions:
Home Purchase Price: 480k
20% downpayment: 96k
Interest rate: 6.1%
HOA monthly: 300

Category	Monthly Cost	2026 Orlando Context
I. FIXED CARRYING COSTS	$3,259	Mandatory Cash Outflow
Mortgage (P&I)	$2,324	$384k loan @ 6.1% (30-yr fixed).
Property Taxes (Net)	$345	OC Millage (~17.2) minus Homestead Exemption.
Homeowners Insurance	$290	Current market average for pool homes.
HOA Dues	$300	Your specified average.
II. OPERATIONAL EXPENSES	$1,040	Monthly Upkeep & Local Labor
Utilities (Elec/Water/Sewer)	$350	Includes high A/C usage and pool pump power.
Pool Service	$150	Professional cleaning and chemical balancing.
Lawn & Irrigation	$130	Mowing, edging, and sprinkler head repairs.
Pest & Termite Bond	$85	Subterranean bond + quarterly pest spray.
General Maintenance	$325	"1% Rule": filters, paint, and pressure washing.
III. REVISED RESERVES	$262	Capital Savings (Your New Timelines)
Roof Reserve	$125	$22.5k replacement every 15 years.
HVAC Reserve	$71	$14.5k replacement every 17 years.
Pool Resurfacing	$66	$12k resurface every 15 years.
IV. TAX INCENTIVES	(-$62)	Direct Bill Reductions
Homestead Exemption	(-$62)	Direct savings on your OC property tax bill.
Federal Income Tax Benefit	$0	Standard Deduction ($32.2k) > Itemized ($27.4k).
TOTAL TRUE MONTHLY COST	$4,499	Actual All-In Monthly Budget

If there is one thing I realized after buying a house, you get way more unexpected costs than you realize. Decorations for the holidays, little fixes, making it nicer, hosting more people over, decor, furniture, grills, garage gym, etc. Those are the things you don't think about, but you want to make your house feel like a home and they can add up quick.

However, one thing I will add, which is not necessarily your intention of the post, which is about costs.

There's something really great about owning where you live and getting to do what you want with it more then renting a place. Our home can be expensive, but I love it and I love getting to call it my own.

I never ever wanted to house hack, even though it could make a lot of financial sense, but I never thought the potential emotional toll on my home life is worth it if things didn't go well. So I have always placed a higher emphasis on my life away from work then maybe just strictly the financial figures. Which I am very much the opposite when looking at strictly investing and investment properties

I think this is the answer I was secretly hoping to get. Calling something your own has meaning. And if property taxes do actually get eliminated then I will truly own the home. Thank you for your perspective, Chris.

Yea I'm waiting to see what the actual proposal for eliminating property taxes looks like before if I decide its a good idea or not. I like the idea, but a lot hinges on how that will effect the state, county and local budgets and how they plan to counter act that. I am hopeful they will have solid answers because I want to be in support of it, but if we did eliminate homestead property taxes, and it caused a huge defecit or problem, it would be very difficult to convince people to start paying property taxes again, so a tough decision to reverse.

0 Reply

Kevin Poler

Member since 2026 · 15 posts · 8 votes

10mo

You’re not wrong on the math — but the framing is mixing investment underwriting with a lifestyle decision.

A few thoughts:

A primary residence shouldn't be evaluated like a rental. Cash flow, reserves, and "true cost" matter, but they're inputs to affordability and lifestyle — not ROI optimization.
Your biggest swing factors aren’t interest rate or maintenance, they’re purchase price discipline and optional costs (HOA, pool, paid services vs DIY). Those alone can move the monthly number by $800–$1,200.
The real hidden cost most first-time buyers miss isn’t just repairs — it’s choice creep: furnishing, upgrades, and making the house feel like “home.” That’s real, but optional and controllable.
Renting + investing elsewhere often wins on paper, but owning buys stability, control, and long-term optionality (future rental, refi, or sale). The question is whether that premium fits your goals and timeline.

If owning stretches your budget or forces you to compromise investing elsewhere, it’s probably too expensive for now. If it’s comfortably affordable and aligned with where your life is heading, the spreadsheet doesn’t need to be perfect.

The numbers don’t look “unrealistic” — they look like a signal to either buy more modestly or delay until the trade-off feels worth it.

2 Reply

David Smith
OP
Member since 2018 · 42 posts · 16 votes
10mo
Quote from @Kevin Poler:
You’re not wrong on the math — but the framing is mixing investment underwriting with a lifestyle decision.

A few thoughts:

A primary residence shouldn't be evaluated like a rental. Cash flow, reserves, and "true cost" matter, but they're inputs to affordability and lifestyle — not ROI optimization.
Your biggest swing factors aren’t interest rate or maintenance, they’re purchase price discipline and optional costs (HOA, pool, paid services vs DIY). Those alone can move the monthly number by $800–$1,200.
The real hidden cost most first-time buyers miss isn’t just repairs — it’s choice creep: furnishing, upgrades, and making the house feel like “home.” That’s real, but optional and controllable.
Renting + investing elsewhere often wins on paper, but owning buys stability, control, and long-term optionality (future rental, refi, or sale). The question is whether that premium fits your goals and timeline.

If owning stretches your budget or forces you to compromise investing elsewhere, it’s probably too expensive for now. If it’s comfortably affordable and aligned with where your life is heading, the spreadsheet doesn’t need to be perfect.

The numbers don’t look “unrealistic” — they look like a signal to either buy more modestly or delay until the trade-off feels worth it.
I love your comment about the choice creep. I didn't think about it to be honest. I know my wife will want to beautify our home (which is great!) but I do believe she's currently not interested in thinking about costs associated with upgrades.
0 Reply
Kevin Poler
Member since 2026 · 15 posts · 8 votes
10mo
Glad that was helpful. Choice creep is one of those things that never shows up in spreadsheets, but absolutely shows up in real life. The important part is just being honest about it upfront so the decision is intentional — not surprising later. Sounds like you’re thinking about this the right way.
I love your comment about the choice creep. I didn't think about it to be honest. I know my wife will want to beautify our home (which is great!) but I do believe she's currently not interested in thinking about costs associated with upgrades.

0 Reply

Allison Park

Member since 2024 · 158 posts · 88 votes

10mo

Hi David,

I would agree with all the responses so far. If you begin with a "starter home" with a small yard your overall costs will be much lower and you can build equity that you can use towards your "level up home", or rent out for cash flow. I actually like small fee HOA neighborhoods because they tend to keep property values higher. I bet you can find one with a community pool :)

1 Reply

David Smith
OP
Member since 2018 · 42 posts · 16 votes
10mo
Quote from @Allison Park:

Hi David,

I would agree with all the responses so far. If you begin with a "starter home" with a small yard your overall costs will be much lower and you can build equity that you can use towards your "level up home", or rent out for cash flow. I actually like small fee HOA neighborhoods because they tend to keep property values higher. I bet you can find one with a community pool :)

I didn't know small fee HOAs keep property values higher, thanks!
0 Reply
Allison Park
Member since 2024 · 158 posts · 88 votes
10mo
@David Smith HOAs in general do because they enforce architectural guidelines and bylaws. So for example owners have to take care of their properties or they get fined. I say small HOA because if you have too many amenities the fees will be higher. For example a community pool is probably fine, but fitness center, pickle ball courts, club houses can increase fees and special assessments due to maintenance needed over time.
0 Reply

Ken M.

Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes

10mo

Quote from @David Smith:

Hello all,

Historically, I've used BiggerPockets for investing and to meet people at conferences. Now it's finally time to buy our own home. Really, my wife is the real advocate of this endeavor. She wants that feeling of having our own home that we can paint and design however we want, and doesn't want to be at the mercy of a landlord raising the rent. I myself prefer the idea of a home for the same reasons but probably would lean towards renting our home and buying another investment property.

Anyways, I tried calculating the true cost of homeownership in Orlando and it seems absolutely unrealistic. Please pardon my lack of experience in this department but here are the numbers. Gemini helped create this table so it may have some issues.
Assumptions:
Home Purchase Price: 480k
20% downpayment: 96k
Interest rate: 6.1%
HOA monthly: 300

Category	Monthly Cost	2026 Orlando Context
I. FIXED CARRYING COSTS	$3,259	Mandatory Cash Outflow
Mortgage (P&I)	$2,324	$384k loan @ 6.1% (30-yr fixed).
Property Taxes (Net)	$345	OC Millage (~17.2) minus Homestead Exemption.
Homeowners Insurance	$290	Current market average for pool homes.
HOA Dues	$300	Your specified average.
II. OPERATIONAL EXPENSES	$1,040	Monthly Upkeep & Local Labor
Utilities (Elec/Water/Sewer)	$350	Includes high A/C usage and pool pump power.
Pool Service	$150	Professional cleaning and chemical balancing.
Lawn & Irrigation	$130	Mowing, edging, and sprinkler head repairs.
Pest & Termite Bond	$85	Subterranean bond + quarterly pest spray.
General Maintenance	$325	"1% Rule": filters, paint, and pressure washing.
III. REVISED RESERVES	$262	Capital Savings (Your New Timelines)
Roof Reserve	$125	$22.5k replacement every 15 years.
HVAC Reserve	$71	$14.5k replacement every 17 years.
Pool Resurfacing	$66	$12k resurface every 15 years.
IV. TAX INCENTIVES	(-$62)	Direct Bill Reductions
Homestead Exemption	(-$62)	Direct savings on your OC property tax bill.
Federal Income Tax Benefit	$0	Standard Deduction ($32.2k) > Itemized ($27.4k).
TOTAL TRUE MONTHLY COST	$4,499	Actual All-In Monthly Budget

Right now, in many places in Florida, seller's are accepting "creative finance" and that means buyers are not using a bank. They are working directly with a seller. By the way, no need for an agent in this scenario. That keeps costs down.

So, instead of 20% down it's 10% down. Instead of 6.1% interest it's 3% or 4% and instead of being tied into a new loan of 30 years, it's the remaining 25 years of the loan. This process is called a Wrap (some use "Subject To" but that's risky to the seller).

So, when you calculate it all out, on your $384,000 loan @ 6.1% fixed, with a monthly payment PI of $2,327 for a $837,727 total 30 year loan, with 20% down of $100,000. That's $100,000 cash out of your pocket money down. And that's probably $5,000 in closing costs to buy the loan.

But, when you take over someone's loan with a Wrap, they've paid down the loan, already paid the loan origination fee, and their interest rate is less, say 4%, with little closing costs. So, you have $359,997 left on the loan with a monthly PI payment of $1,833 @ 4% with $549,900 still owing if go to the length of the loan. A savings of $287,827. You've put $50,000 down instead of $100,000. You keep the $50,000 difference and that difference buys a lot of paint, new curtains, lawn chairs for the pool and meat for the BBQ. Makes the wife happy.

This is not speculation. I've been doing these for 30 years. It does take some explanation though. It works in Florida, Georgia to California, Texas to Idaho and everywhere in between.

2 Reply

David Smith

OP

Member since 2018 · 42 posts · 16 votes

10mo

Quote from @Ken M.:

Quote from @David Smith:

Hello all,

Historically, I've used BiggerPockets for investing and to meet people at conferences. Now it's finally time to buy our own home. Really, my wife is the real advocate of this endeavor. She wants that feeling of having our own home that we can paint and design however we want, and doesn't want to be at the mercy of a landlord raising the rent. I myself prefer the idea of a home for the same reasons but probably would lean towards renting our home and buying another investment property.

Anyways, I tried calculating the true cost of homeownership in Orlando and it seems absolutely unrealistic. Please pardon my lack of experience in this department but here are the numbers. Gemini helped create this table so it may have some issues.
Assumptions:
Home Purchase Price: 480k
20% downpayment: 96k
Interest rate: 6.1%
HOA monthly: 300

Category	Monthly Cost	2026 Orlando Context
I. FIXED CARRYING COSTS	$3,259	Mandatory Cash Outflow
Mortgage (P&I)	$2,324	$384k loan @ 6.1% (30-yr fixed).
Property Taxes (Net)	$345	OC Millage (~17.2) minus Homestead Exemption.
Homeowners Insurance	$290	Current market average for pool homes.
HOA Dues	$300	Your specified average.
II. OPERATIONAL EXPENSES	$1,040	Monthly Upkeep & Local Labor
Utilities (Elec/Water/Sewer)	$350	Includes high A/C usage and pool pump power.
Pool Service	$150	Professional cleaning and chemical balancing.
Lawn & Irrigation	$130	Mowing, edging, and sprinkler head repairs.
Pest & Termite Bond	$85	Subterranean bond + quarterly pest spray.
General Maintenance	$325	"1% Rule": filters, paint, and pressure washing.
III. REVISED RESERVES	$262	Capital Savings (Your New Timelines)
Roof Reserve	$125	$22.5k replacement every 15 years.
HVAC Reserve	$71	$14.5k replacement every 17 years.
Pool Resurfacing	$66	$12k resurface every 15 years.
IV. TAX INCENTIVES	(-$62)	Direct Bill Reductions
Homestead Exemption	(-$62)	Direct savings on your OC property tax bill.
Federal Income Tax Benefit	$0	Standard Deduction ($32.2k) > Itemized ($27.4k).
TOTAL TRUE MONTHLY COST	$4,499	Actual All-In Monthly Budget

Right now, in many places in Florida, seller's are accepting "creative finance" and that means buyers are not using a bank. They are working directly with a seller. By the way, no need for an agent in this scenario. That keeps costs down.

So, instead of 20% down it's 10% down. Instead of 6.1% interest it's 3% or 4% and instead of being tied into a new loan of 30 years, it's the remaining 25 years of the loan. This process is called a Wrap (some use "Subject To" but that's risky to the seller).

So, when you calculate it all out, on your $384,000 loan @ 6.1% fixed, with a monthly payment PI of $2,327 for a $837,727 total 30 year loan, with 20% down of $100,000. That's $100,000 cash out of your pocket money down. And that's probably $5,000 in closing costs to buy the loan.

But, when you take over someone's loan with a Wrap, they've paid down the loan, already paid the loan origination fee, and their interest rate is less, say 4%, with little closing costs. So, you have $359,997 left on the loan with a monthly PI payment of $1,833 @ 4% with $549,900 still owing if go to the length of the loan. A savings of $287,827. You've put $50,000 down instead of $100,000. You keep the $50,000 difference and that difference buys a lot of paint, new curtains, lawn chairs for the pool and meat for the BBQ. Makes the wife happy.

This is not speculation. I've been doing these for 30 years. It does take some explanation though. It works in Florida, Georgia to California, Texas to Idaho and everywhere in between.

Hey Ken, I'm somewhat familiar with the subject to loans. I always thought they were risky. But I don't have any personal experience with them. Feel free to elaborate on it.

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Ken M.

Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes

10mo

Quote from @David Smith:

Quote from @Ken M.:

Quote from @David Smith:

Hello all,

Historically, I've used BiggerPockets for investing and to meet people at conferences. Now it's finally time to buy our own home. Really, my wife is the real advocate of this endeavor. She wants that feeling of having our own home that we can paint and design however we want, and doesn't want to be at the mercy of a landlord raising the rent. I myself prefer the idea of a home for the same reasons but probably would lean towards renting our home and buying another investment property.

Anyways, I tried calculating the true cost of homeownership in Orlando and it seems absolutely unrealistic. Please pardon my lack of experience in this department but here are the numbers. Gemini helped create this table so it may have some issues.
Assumptions:
Home Purchase Price: 480k
20% downpayment: 96k
Interest rate: 6.1%
HOA monthly: 300

Category	Monthly Cost	2026 Orlando Context
I. FIXED CARRYING COSTS	$3,259	Mandatory Cash Outflow
Mortgage (P&I)	$2,324	$384k loan @ 6.1% (30-yr fixed).
Property Taxes (Net)	$345	OC Millage (~17.2) minus Homestead Exemption.
Homeowners Insurance	$290	Current market average for pool homes.
HOA Dues	$300	Your specified average.
II. OPERATIONAL EXPENSES	$1,040	Monthly Upkeep & Local Labor
Utilities (Elec/Water/Sewer)	$350	Includes high A/C usage and pool pump power.
Pool Service	$150	Professional cleaning and chemical balancing.
Lawn & Irrigation	$130	Mowing, edging, and sprinkler head repairs.
Pest & Termite Bond	$85	Subterranean bond + quarterly pest spray.
General Maintenance	$325	"1% Rule": filters, paint, and pressure washing.
III. REVISED RESERVES	$262	Capital Savings (Your New Timelines)
Roof Reserve	$125	$22.5k replacement every 15 years.
HVAC Reserve	$71	$14.5k replacement every 17 years.
Pool Resurfacing	$66	$12k resurface every 15 years.
IV. TAX INCENTIVES	(-$62)	Direct Bill Reductions
Homestead Exemption	(-$62)	Direct savings on your OC property tax bill.
Federal Income Tax Benefit	$0	Standard Deduction ($32.2k) > Itemized ($27.4k).
TOTAL TRUE MONTHLY COST	$4,499	Actual All-In Monthly Budget

Right now, in many places in Florida, seller's are accepting "creative finance" and that means buyers are not using a bank. They are working directly with a seller. By the way, no need for an agent in this scenario. That keeps costs down.

So, instead of 20% down it's 10% down. Instead of 6.1% interest it's 3% or 4% and instead of being tied into a new loan of 30 years, it's the remaining 25 years of the loan. This process is called a Wrap (some use "Subject To" but that's risky to the seller).

So, when you calculate it all out, on your $384,000 loan @ 6.1% fixed, with a monthly payment PI of $2,327 for a $837,727 total 30 year loan, with 20% down of $100,000. That's $100,000 cash out of your pocket money down. And that's probably $5,000 in closing costs to buy the loan.

But, when you take over someone's loan with a Wrap, they've paid down the loan, already paid the loan origination fee, and their interest rate is less, say 4%, with little closing costs. So, you have $359,997 left on the loan with a monthly PI payment of $1,833 @ 4% with $549,900 still owing if go to the length of the loan. A savings of $287,827. You've put $50,000 down instead of $100,000. You keep the $50,000 difference and that difference buys a lot of paint, new curtains, lawn chairs for the pool and meat for the BBQ. Makes the wife happy.

This is not speculation. I've been doing these for 30 years. It does take some explanation though. It works in Florida, Georgia to California, Texas to Idaho and everywhere in between.

Hey Ken, I'm somewhat familiar with the subject to loans. I always thought they were risky. But I don't have any personal experience with them. Feel free to elaborate on it.

Subject To IS risky, Wraps much less so. Bigger Pockets likes that kind of detail discussed in a specific forum. I cover it in my post at https://www.biggerpockets.com/forums/517/topics/1269751-new-...

1 Reply

Michael Evans

General Contractor · Palm Desert, CA · Member since 2016 · 197 posts · 79 votes

9mo

You said there’s no need for a realtor but there IS a need for an experienced transaction coordinator. Don’t try to do a subject to deal without all the proper paperwork; subto addendum’s and seller acknowledgments that they completely understand everything they are doing. The comment that it’s risky to the seller is true without it.

0 Reply

Ken M.
Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
9mo
Quote from @Michael Evans:

You said there’s no need for a realtor but there IS a need for an experienced transaction coordinator. Don’t try to do a subject to deal without all the proper paperwork; subto addendum’s and seller acknowledgments that they completely understand everything they are doing. The comment that it’s risky to the seller is true without it.

People don't like to discuss it, but it's true. It can be a problem. I've done mostly Subject To for 30 years. In that 30 years, I've been sued twice, once in 2008 and again in 2022. I know how the system works.

Any "Guru" (the guy on Youtube) that says SubTo isn't to be worried about, is being dishonest, to entice people to join his group. Money is a powerful motivator.
He has had 10 "Due On Sale" called (SubTo purchases using HIS Transaction Coordinators) in 2025.

This one doesn't happen to be his, but it's what misunderstanding Subject To it leads to. It's a serious problem and only a serous person takes it seriously.

And another one

So, if you are going to do Subject To, get trained by someone who actually knows what he is doing, not by someone who has a "Community" that is an echo chamber of "they're easy to do"
Yeah, and it's easy to get sued too.

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Real Cost of Owning a Home

Real Cost of Owning a Home

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