The Hidden Costs of Home Ownership
Last week we discussed some top questions you should ask your realtor before buying a home. Today, we're going to dive into the details of what EXACTLY you are going to be putting money into when you buy a home. A lot of times I hear folks say, buying a home is so much cheaper than renting. You know what? In the long run, when you've paid off your mortgage, yes it is. And sometimes comparing rent to mortgage, it is, too. But there are other costs involved that are important to know when making an investment such as buying a home.
1. Moving Costs - don't forget the average cost of movers, excluding moving supplies, is $300-500 per family. Keep this in mind when you're looking to start buying packing materials and possible hire someone. Other moving costs including: setting up/ changing/ discontinuing your WiFI, cable, water, heat, electricity, trash bills, etc.
2. "Filling the Rooms" - I didn't believe my parents when they said the "more space you have, the more space you'll want to fill," but it is true. Remember to stick to your budget and take your time when filling you new house with furniture, decor, or updates!
3. Home insurance, home warranties - you have to have home insurance (which can be a life-saver --it's how we got a renovation on our kitchen (story another time, it was awful at the time) --) but you can also purchase home warranties which cost an annual fee and then a small deductible to get you new major appliances in your home / repairs if something breaks. Read: if you need a new garbage disposal, a new stove, washer/dryer, etc.
4. Maintenance supplies - remember in your apartment when the maintenance guy would come and replace a burn out light bulb? You have to hire someone or DIY now! Remember you'll need to save time and money and/or eventually pay for someone to maintain your grounds. This includes landscaping, installing sod, lawn mowing, weeding, gardening, fixing light bulbs, touching up paint, fix broken or cracked walls, tile, ceiling fans, you name it. You can also outsource via hiring a house keeper, maintenance guy, electrician, painter, lawn service, etc but it is good to prepare and know some of these costs will come up eventually!
5. Money for repairs or future renovations - you also need to be able to pay for things if they break... such as, but not including: fridge, dishwasher, water heater, a clogged chimey, clogged toliet, broken stove/microwave/dishwasher/water heater/AC. So keep your warranties so you can use them if you can to get free/and/or cheap replacements
I'm not trying to freak you out. You will find a way to do what works for you and your family. But it is important to know the exact financial situation you are getting into -- and ask your realtor about what, if any of these costs, are realistic in the short term for your budgeting purposes.
Did I miss any major hidden costs? If so, please comment below!
The final post in our series this week will be about what to do once you've bought a house: what do you renovate and what is worth saving your money.