The Hidden Costs of Owning a Home
Many people think if they get a mortgage equal to the amount of money they are paying in rent, that’s all they need to become a homeowner. What they don’t realize is that there are hidden costs that come with homeownership that they may not have considered. If you are looking into buying your own home, there are a few things you should consider before jumping into the game.
Appliances
Many rental properties come complete with a refrigerator, stove, dishwasher, and if you are lucky, a washer and dryer set. When you own a home, these are your responsibility. When you purchase a new home, it may very well come with some appliances, but remember that they will not last forever. When they break down, this hidden cost will be yours when you become a homeowner. You won’t be able to call your landlord to get it repaired.
Repairs
Older homes will cost you more in repairs than a newer home, but be prepared for unexpected, hidden costs. Roofs will leak, floor may buckle, and holes may mysteriously appear in the walls. These will all now be your expenses when you become a homeowner. This will also include refinishing damaged hardwoods or replacing old, worn carpeting, or any other cosmetic changes you need to make.
Taxes
One thing you don’t have to worry about as a renter is taxes. Once you are become a homeowner, you are also suddenly expected to pay property taxes. The taxes you will have to pay will depend on where you live and the value of your property.
Insurance
You may have renter’s insurance while you are renting, but you aren’t responsible for other types of home insurance. Once you buy a property you have to get insurance to protect your investment. Some banks or mortgage companies will insist you have certain types of insurance on your home for the duration of your payment plan.
Disaster
This will depend on where you live. Some places are more prone to hurricanes, tornadoes, or flooding than others. If such a disaster were to occur, it will be up to you to rebuild or repair. If you have the proper insurance, your costs will be less, but not all damages may be covered in full. The rest will have to come out of your pocket once you become a homeowner.
Plumbing and Heating
Like appliances, your heating and plumbing systems are now your responsibility. Even with a new system, there are hidden costs involved you may not have considered. Homeowners should, at the very least, have their heating system inspected before each cold season to ensure it is working properly. After you become a homeowner, that cost will come out of your pocket.
Other Utilities
As a renter, you may have had certain utilities included in your rent. If you have a great deal, you may have heat and water included. When you become a homeowner, those utilities are now all on you. You will have to pay for water, electric, gas, garbage disposal, cable, and phone.
Landscaping
Are you excited about the big, beautiful backyard you hope will come with your new home? If you’ve never had a yard, this might be a huge selling point for you when you look for a home of your own. What you may not realize is that there are costs involved that you may not be ready for when you become a homeowner.
Many landlords take care of the landscaping and the renter doesn’t have to think about it. When you become a homeowner you have to take care of it yourself. You may even be looking forward to it. This does not come without costs. If you choose to care for your yard on your own, you will, at the very least, need to purchase a lawnmower. You can hire a landscaping company, but this is still your cost.
Final Thoughts
I’m not trying to discourage anyone from owning their own home; I’m just trying to point out the hidden costs so you are better prepared to take the leap. A new home that is totally yours is a great dream; just make sure you are ready to handle the extra costs that come with homeownership.
