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I am planning to sell my apartment in New York City. I have only owned my apartment for 2 years, so I know I most definitely won't be able to "break it even." I think a more realistic goal is to lose only what it would have cost me to rent a comparable apartment by the time I sell my apartment.

so If the apartment costs me 500k (including closing cost), and my monthly payment is 2k (mortgage+HOA+other expenses), I would have to sell the apartment for 500K + sellers closing cost to achieve this goal.

Basically, I will lose those monthly payment and whatever I paid to fix my apartment

Please let me know if my thinking process is correct.

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  • Is down payment included in the 500k?
    – Hart CO
    Dec 10 '20 at 23:29
  • @HartCO Yea, down payment + mortgage + closing cost Dec 10 '20 at 23:51
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You are falling for the sunk cost fallacy. What you paid originally is of no consequence - you've already paid it, so it should have no financial bearing on your decision to sell or not.

If you want to sell, you should sell your apartment for the highest price that someone is willing to pay for it, regardless of what you paid for it.

Of course, it's fine to set a minimum price at which you're willing to sell, but that price should be based on future comparisons - e.g. how much do I need to net in order to rent or buy an equivalent apartment. If you try to set a minimum price that guarantees you a profit, you may not find any buyers and be stuck with the apartment.

If you do make a profit, that's great, but even if you had a net loss over two years it still may be a good decision to sell.

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  • I like your ways of thinking and it is definitely correct. I am putting a lot of pressure on myself for NOT losing money. Dec 10 '20 at 23:52
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Assuming that the need to sell now at any price isn't overwhelming, the minimum goal is to sell the unit for enough money to pay the closing costs you will have as a seller, and still pay off the mortgage. Selling for less than that means that you will need additional cash to complete the process.

Assuming that you can get more than that minimum price means that you will be returning some of your down payment, which is a good thing. Selling for more than the original price plus your selling closing costs means that you got everything back plus a little profit, which is a great thing.

In between the minimum price and the goal of making a profit, you have to decide if the ownership experience was worth it. In some cases the non-monetary issues are more important, in other cases it is purely a financial analysis.

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