Hidden Costs Of Home Ownership – Can I Afford To Buy A Home?

If you talk to a REALTOR, they’ll tell you how buying your home is one of the best investments you could ever make as home prices have pretty much always risen.

However, home ownership isn’t everything it’s made out to be.  For some, it’s a right of passage, something their grandparents did, something their parents did, and something they’ll do too.

However, for those on a tight budget, renting may be a better option for you as there are probably plenty of home ownership costs you didn’t think about when you’re renting an apartment.  Buying a home isn’t always the right choice and while the final choice is up to you, here are some of the hidden costs of home ownership that you’ll need to budget for or you could be SOL when that big bill shows up in your mailbox.

Costs Before You Move In

Moving – If you’re just moving across town and have friends with pickup trucks, moving costs will probably only total whatever you spend on a few boxes of pizza and a case or two of beer to keep the people helping you move happy.  However, if you’re moving to a different city and need to rent a moving van or hire professional movers, this can easily add up to thousands of dollars.

Inspections / Appraisals -  Before you can buy your home, there are a variety of inspections and such that need to be done and while some of them might be rolled into your mortgage, some of them will likely come out of pocket like the appraisal and inspection which can run $350-$500.

Painting / Renovation – If you’re purchasing a fixer-upper or even a home that’s in good shape but just needs a fresh set of paint, keep in mind that stuff all costs money.  A gallon of paint can cost $20 which will cover one room and if you don’t have all the supplies like rollers and paintbrushes, expect to spend a bunch more.  Any type of repair or renovation will cost much more.

Costs Once You Move In

PITI (Payment – Interest – Taxes – Insurance) – Depending on how your mortgage payment is setup, you might only be paying the payment plus interest.  If that’s the case, then you’ll need to make sure you’re saving money so you can pay your homeowners insurance and property taxes when they come due as well.

Furnishings – If you decide you need to get nicer or newer or more furniture when you move, this can get expensive in a hurry.  If you’re looking for good deals on nice used furniture, try Craigslist.

Water & Garbage &  Other Utilities – When you’re living in an apartment, there are certain little expenses that you don’t actually have to pay for separately, often water and garbage are included in your rent though some may have gas or electric paid for too.  Once you are in your own home, all of those costs fall to you.  Expect water to run $20-$30/month and garbage to run $15-$30/month.

Maintenance & Upkeep – This can be a big one especially for people with older homes.  All homes requires some maintenance here and there to stay in tip top shape and it all will come out of your pocket.  If you need to replace a furnace or air conditioner, expect to spend $2,000.  A new roof can run $6,000-$20,000.  You can’t  just call up the landlord if you have a leaky faucet or the hot water isn’t working – you’ll have to call up the plumber and pay the service call fee plus repairs.

Lawn Care – If you lived in an apartment you probably never had to think about mowing the lawn, raking the leaves, or shoveling the snow in the winter.   That means you’ll have to purchase a lawn mower, a rake, shovels, and possibly a snowblower.  Either that, or you’ll have to spend even more to pay someone to do it for you.  Also keep in mind, if there are dry spells during the summer that you may want to water your lawn to keep it looking nice which will mean a higher water bill.

Home Association Fees – While this won’t apply to everyone, if your new home is in an area with a Home Association, then you’ll have that monthly payment as well which could run anywhere from $80-$600/month.

Appliances – If your appliances are brand new, then they’ll be under warranty but once that warranty runs out, you’ll want to budget money for repairs and replacements.  Most major appliances these days (stovetops, ovens, dishwashers, refrigerators) are only expected to last 8-12 years.  So make sure you’ve got money saved up to replace or repair them when the time comes.

Pest Control – Unless you like the thought of living with bugs and the possibility of termites taking up residence in your home, you’ll need to do regular pest control to keep pests out of your home and the often means calling up an exterminator once or twice a year.

There are of course advantages to owning a home like it being yours and you can paint the walls whatever color you please and you don’t have to worry about having noisy neighbors above you or the ones below you pounding on the ceiling with broomsticks if they think you’re making too much noise.   Just keep in mind these extra costs as they need to be factored into your budget before you decide if you can afford to buy a home or if you should just continue to rent.

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