Ongoing homeowner expenses to keep in mind
While first time buyers are prepared to budget for their monthly mortgage payments, many are shocked at the hidden costs of homeownership that come long after closing. With no landlord or super to call when things go on the fritz, homeowners can be on the hook for hundreds – if not thousands – of dollars in repairs. The following are five of the ongoing costs of homeownership that new buyers should budget for.
1. Property taxes
Property taxes are usually paid twice per year and are based on the value of your home. Because of this, property taxes can increase – or decrease – from year to year. Property taxes vary from state to state and even county to county. The taxes on a property should be included as part of the MLS listing to help new buyers add this expense to their budget.
2. Homeowner’s insurance
Upgrading from renters to homeowner’s insurance can be a big hit to the budget. In addition, there are a variety of factors that impact how much your monthly premium is. Buying an older home? Expect to pay more because the heating, plumbing, and electrical systems are older – and more prone to disaster. Have a house with a security system? You may be entitled to savings.
In addition to homeowner’s insurance, check to see what additional hazard insurance policies are recommended for your area. This policies, such as flood, earthquake, or hurricane insurance, are needed in addition to your primary homeowner’s insurance policy – and will increase your monthly insurance costs.
3. Lawn care
Lawn care is a hallmark of most suburban neighborhoods – and can be surprisingly pricey. New buyers moving from urban areas or apartments are often shocked at the cost of buying a new lawn mower, weed whacker, hose, hedge trimmer, rake, shovel, and more for their new home. Not interested in doing yard work? Expect to pay around $100/month for landscaping services.
4. Maintenance and upkeep
The majority of homeowners have an ongoing list of home projects. Replacing gutters, repairing the roof, installing new windows, staining the fence, power washing the driveway, cleaning the chimney, or patching the siding are just some of the outdoor projects homeowners may face. Inside the home, be prepared to upgrade appliances, replace hot water heaters, invest in new flooring, replace toilets, and more. While a few large projects such as roof or window replacement may be partially covered by homeowner’s insurance, most care and maintenance costs fall on the homeowner.
Time is arguably the number one cost of being a homeowner. Nights and weekends can become consumed by ongoing lists of cleaning and maintenance projects.
“The time you used to spend with your kids, now you spend on lawn maintenance or changing a lightbulb!” said Neil Ellington, the executive vice president of CESI Debt Solutions.