Owning a home may seem like a right of passage to becoming an adult. However, this decision is not always right for everyone’s situation. There are a few reasons you may be financially swayed from owning a home to renting one instead. Before meeting with the real estate agent make sure you think about these five homeowner expenses.
The Cost of Property Taxes
For some homeowners, the yearly property taxes can be very high depending on where they live and the home they choose to buy; however, on average, yearly property taxes are between $2,000 and $3,000 dollars. This number can add up to a higher than anticipated monthly expense and make owning a home difficult on your budget. You can figure out home much you will pay in property taxes by using an online mortgage calculator.
Covering Your Home with Insurance
Your home and condo will need to be covered with insurance. If you are buying a home, this price will vary depending on the value of your home. You will need to cover the cost of rebuilding your home in case of a disaster. To identify this number your insurance company factors in both the area that you live in along with the estimated cost of building supplies.
Doing Maintenance on Your Own
You will not be able to rely on someone else to fix your place when something goes wrong; it is now your responsibility. As a first time homebuyer, this responsibility can be very costly and overwhelming. Appliances will wear down and need to be fixed or replaced and even though not all of the maintenance will break the bank, some can and you will need to be prepared to fix these items.
The Extra HOA Fees
Some homeowners will pay an extra homeowner’s fee on top of their mortgage fee. This cost that is usually tied into your payment when renting can be an extra $100-$400 dollars a month. It will cover the expenses of things like the landscaping and maintenance of the pool and fitness room.
Water, Sewer, Electricity and More
You will need to cover all the utility costs of your home. The average homeowner pays about $300 per month in utilities.
As a homeowner you will need to think beyond the monthly mortgage cost. In your budget it is important to factor these five homeowner expenses so you are not surprised at the end of the month or year. These “surprises” can make home ownership even more difficult, but being prepared can help prevent hardship.