Hidden Costs of Owning a Home

Hidden Costs of Owning a Home
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Buying a home is an exciting time for so many reasons, but it can go downhill if you’re not prepared for all of the additional expenses. You may be prepared to pay the down payment and closing costs, but what about the additional costs that go into owning a home? Here are 4 hidden costs of owning a home to be aware of before making your investment.

Hidden Costs of Owning a Home

Repairs

Unless you’re buying a newly built home, it’s important that you budget for repairs even before you buy. If you are buying a home that needs a new roof, a fresh coat of paint, new landscaping, etc. you’ll need to budget for those repairs from the get go. While every situation is different, the typical rule of thumb is to expect to spend an average of 1% of the value of your home on repairs per year. You may not spend that much each year, but some years you’ll likely face a broken furnace, appliance replacement, or other costs that eats up that money you saved. Repairs are one of the top hidden costs of owning a home.

Utilities

While you’re likely used to paying a portion of utilities for an apartment space, the utility bills are significantly more for a home. There are no costs that are forgiven by a landlord, plus the overall space is likely larger. Additionally, if you plan to add home security to your space, that’s an upfront cost for the equipment, plus a monthly service cost. Make sure to budget for these costs when you buy a home.

Furniture

With a bigger space comes additional furniture to fill it. Make sure to budget for furniture costs when buying a home. If you’re moving from a 1000 sq. ft. apartment, to a 2800 sq. ft. house, you’re definitely going to be purchasing furniture. Additionally, if you’re redoing an outdoor living space, you’re going to need to purchase outdoor furniture for your home. All of the furniture expenses can add up fast, so it’s important to budget for these costs before you buy a home.

Property Taxes

You might think, “I’m paying $1,500 a month in rent, for that I can pay a lower mortgage and own a home!” Well, yes – as long as you’re plugging in the property taxes. You will need to find out what the taxes are in advance, divide it by 12 and the add it to your monthly payment. Also, property taxes are going to keep going up, so make sure you have room left in your budget to pay even more taxes in the future.

You may also like: The Advantages of Buying a Home Vs. Renting

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