Most people dream of owning a home and investing in a property that can help them develop financial wealth over time. Homeownership is recommended by most financial experts and can yield significant profits as the property appreciates over time. If you plan to own a home, it’s also important to be informed of the hidden costs that come with homeownership to ensure you’re financially prepared for the commitment.
Each home comes with property tax, which can add thousands of dollars to the cost of owning the home each year. The rate of the property tax varies by the state you live in and can fluctuate depending on the market and growth in the local area.
Research the property taxes in advance before committing to purchasing a home in a specific city or state. Add it to your monthly mortgage payment to determine how much house you can afford.
The property taxes will also be higher if you purchase new construction in an area that’s developing rapidly. The property taxes will continue to increase, making it necessary to have extra wiggle room in your budget. Getting a lower interest rate can also allow you to afford the higher costs of property taxes over time.
Every home requires maintenance to keep it looking attractive and functional. Whether you need to fix a leaky faucet or are dealing with loose bricks on the chimney, maintenance costs should be included in your monthly budget to afford with the upkeep of the house. The type of repairs and maintenance needed is consistent and can be thousands of dollars at times, whether your HVAC system needs to be replaced or you have appliances to repair. If you fail to keep up with the maintenance and invest in the home, it can cause it to lose value and can also lead to more expensive repairs at a later time.
There are many utilities that you’ll need to pay for on your new property, which includes water, electricity, sewer, and trash. In many cases, the cost of utilities can be just as high as what you pay in property taxes. There are many factors that influence the cost of your utilities, which include your appliances, local costs, and a change in the climate. If you want to get an idea of what you’ll end up paying before you move in, ask one of your neighbors what they pay each month.
One of the most important parts of maintaining your home is keeping up with its appearance. The quality and look of your home’s exterior influence your curb appeal, making it necessary to make improvements and clean up the space from time to time. You may need to invest in a new walkway, install decorative shutters, and add potted plants throughout the property to create an inviting setting. You may also need to invest in new flowers or plants in each season to make the porch or walkway look attractive throughout the year.
Whether you own a small or large property, the lawncare you perform is still a main expense that can cut into your budget. If you don’t want to do any of the work yourself, you can expect to pay an average of $100 each month to hire a professional landscaper to mow and trim your yard. It’ll also cost more to purchase weed killer, fertilizer, and even pest control, which should be applied every season to keep the lawn looking healthy and vibrant.
You can save money doing the work yourself, but it’ll come with more upfront costs because you’ll have to invest in a lawn mower, weed wacker, gloves, hose, and rake. However, you won’t be spending hundreds of dollars throughout the year on landscaping services.
There are many areas of the property where you’ll have to clean to protect the materials on the building from suffering from excess wear. The interior setting may also be too large to attempt to clean on your own every one to two weeks. Consider the size of the property and if you’ll need to set aside part of your budget for cleaning services. Most companies charge an average of $100 per visit.
Furnace and Air-Conditioning
If you want to maintain the temperature in the building, you’ll need to care for your furnace and air conditioner to ensure the units continue to operate well throughout the year. The appliances require cleanings every season and should be inspected by a professional. You’ll also need to budget for replacing the filters every two months.
Water (Water Purification Systems)
Treating the water on your property is necessary to ensure it’s clean and safe to use. Water purification systems range from $500 to $2,000 for the entire house. The cost includes new plumbing lines and connections and a water softener, which is optional.
Internet, Cable, Phones
Cable, internet, and even landlines are often covered by rental properties but are additional costs you have to budget for once you become a homeowner. The costs often add up to $200 each month. If you want to have more wiggle room in your budget, you can opt for going without cable or landlines on the property.
It can be easy to forget that you’ll be combatting different types of pests and critters throughout the year, especially in certain climates. Pest control is necessary to avoid infestations, which can lead to significant damage in your home. Budget for a local pest control company to visit the property every few months to perform treatments, which will cost an average of $100.
Understanding the additional hidden costs of homeownership can allow you to consider multiple expenses while calculating what you can afford. Knowing what expenses you’ll need to add to your budget can make it easier to prepare for the investment and avoid any surprises in the coming years.