Hidden cost of Home Ownership
Being a home owner for the first time means facing costs that you may not have expected such as maintenance, insurance, and other expenses. Over time, the costs can really add up if you are not careful which means it becomes more difficult to pay off your home mortgage. You will need to account for the costs that you will need to pay for your home to be properly maintained and covered so you can maximize the value of your investment.
Creating a Budget
Perhaps it’s not surprising, but up to one-third of all home buyers woefully underestimate the budget needed to cover the cost of home ownership. This means that about 33% of home owners will find themselves struggling to pay the bills because they underestimated the expenses that came with owning a home.
Before you purchase a property, you will need to create a budget based on your current income and additional expenses that includes your vehicle, kids, food, and other payments that you need to make in addition to the following basic costs of owning a home.
Basic Costs
However, it pays to know just what hidden costs you will be facing as part of your home ownership. The good news is that there are several websites that can help you assess the costs before buying a home. sites such as Thumbtack and Zillow will list out all the expenses you can expect to face as a home owner and even narrow it down to your part of the country.
For example, Indianapolis residents pay roughly $4,700 per year in terms of annual expenses, give or take utility costs while San Francisco residents pay upwards of $13,000 per year. This is based on the price or value of the home and the cost of insurance, taxes, and certain other expenses.
A big part of home ownership is the unavoidable costs that you will need to consider before making your purchase. The average home owner pays just over $6,000 annually on property taxes and homeowner’s insurance. This can be a considerable chuck of money from your paycheck, so you will need to consider the costs before buying a home.
The average home owner will pay around $9,000 per year on utility costs. Of course, utility costs may seem obvious, but depending on where you live it may be higher than expected. Sites such as UtilityScore offers estimates based on your location which considers the rates that average home owners are paying. This can be quite helpful if you are looking at monthly costs when paying for your residence.
Keeping Up the Property
One of the most overlooked expenses of home ownership is basic maintenance costs along with paying for upgrades. Some of the expenses that you may charge professionals to do include, but are not limited to the following;
- Cleaning Gutters, Yard Work, and Landscaping
- House Cleaning, HVAC Maintenance, and Pressure Washing
- Carpet Cleaning and More
Depending on where you live, the cost of paying others to do these jobs range from $2,000 to $4,000 per year. Add up these expenses and you’ll have a rough idea of the cost of home ownership.