Costs that homeowners pay that renters don’t

Homeownership is the eventual goal for many renters; paying a mortgage instead of paying rent each month helps to build equity and achieve long-term financial goals and growth. However, there are several costs associated with owning a home that renters do not have. The following are five costs that homeowners pay that renters do not.

  1. Property taxes

All homeowners must pay property taxes; these taxes are often used locally to fund schools, repair roads, and more. The average cost of property taxes in the United States is $2,110 per year []. Potential buyers should take this into account when looking at how much they can afford to pay each month for a mortgage.

  1. HOA fees

Homeowners Association fees can quickly make an affordable mortgage payment out of your budget. Apartment complexes, condos, and neighborhoods can all have HOA fees; while they help fund amenities such as landscaping, fitness centers, pools, and more, they are not included in the monthly mortgage costs.

  1. Homeowners insurance

While most renters carry renter’s insurance, the price difference between renters and homeowners insurance can be steep. Renters insurance is often a fixed cost, but the price of homeowners insurance depends on the appraised value of your home, its security features, square footage, and more. Homeowners should expect to pay around $35 for every $100,000 their home is worth in insurance costs; insurance costs can also go up if you need supplemental plans such as flood or earthquake insurance, which are not included in most standard plans.

  1. Utilities

When renting, most – if not all – of your utilities are included in the cost of rent. Homeowners, however, are responsible for all the utilities including water, gas, electric, trash, cable, and internet. The average homeowners pays $3000 per year in utilities; costs can fluctuate from month to month based on use.

  1. Maintenance and upkeep

Oftentimes the most difficult transition from renting to owning is maintenance; when the dishwasher breaks, the toilet clogs, or the trees get overgrown, there is no landlord to call to repair it. Homeowners can expect to spend around $3000 per year for regular maintenance costs; in addition, it is important to create a savings plan for major repairs such as replacing roofs, water heaters, or air conditioning units.

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