How expensive is it to maintain a home?
There are a lot more expenses to consider when you own a home that are easily overlooked by first time home buyers. Some people feel that if they’re able to afford their mortgage payment, insurance, and real estate taxes throughout the year, that they’ll be successful homeowners. Unfortunately, there are more expenses that have to be covered as a homeowner that you may not realize while you’re renting an apartment. Not understanding all of the costs associated with owning a home can end up breaking the bank if you’re not careful.
Your mortgage payment, taxes, and insurance costs are fairly fixed and easy to determine an budget for. The other costs of homeownership are a little more difficult to calculate because they’re variable costs that depend on the situation that you’re in and your lifestyle. You have semi-fixed costs whenever you pay your utilities, and every other cost should be considered variable.
So what are the different variable costs that you should expect as a homeowner? Here are some of the expenses that you may incur:
- Property taxes
- Home maintenance
- Monthly assessments as a homeowner or co-op homeowner.
- All your utilities such as electricity, water and sewage, gas, television, Internet access, and more.
- Garbage collection which may also include recycling costs depending on where you live.
- Any repairs or maintenance necessary to keep the home in good construction.
- Grounds maintenance and landscaping.
- Snow removal (if you live in colder climates.)
How much you pay for expenses like repairs or maintenance depends on what the condition of the home was before you purchased it. Newer homes have less of a repair cost, while older homes might need some TLC if anything in the home was on its last legs. Sometimes repair and maintenance is a gradual process, often times things with old homes happen suddenly and sometimes the repairs are costly. Utility expenses and landscaping depend on how you use your space and the season it is, but most likely these costs will gradually increase with time. Luckily there are ways to ensure that you’re not caught off guard by expensive repairs if you maintain your property well.
It’s best to have an emergency home fund that you can access in the event that something major occurs and you need emergency repair. Stay up to date on all the proper home maintenance before you have any issues and you’ll save a considerable amount of money. A great idea for those purchasing older properties is to buy a home warranty. Under a home warranty, you’ll be covered in the event that an appliance, electrical system, or mechanical system fails during the first year that you own your home. A home warranty however does not cover any structural issues, so make sure that you select a good home off the bat and that you have a trained home inspector point out any issues that the home has before closing.
Home warranties cover old homes, but what should you do when you’re purchasing a new home? You might think that new homes don’t need repairs, but that’s not always the case. You’ll probably notice some things that haven’t been installed properly in your home if your builder has taken shortcuts. The important thing to do is solve the problem immediately, to delay any major problems. Check that the caulking throughout the bathroom is sufficient. Also make sure that you paint the exterior of the home when you need it. If you don’t keep up with these things, you run the risk of your brand new home looking disheveled and run down.
The Expense Of Real Estate Taxes
1 to 3 percent of your purchase price will end up going toward property taxes at the end of the year, depending on where you live. Some homeowners feel that this is an unfair cost, but there are certain things that you can do to lower the amount of taxes you have to pay.
If you purchase a $100,000 home, you can expect to pay anywhere from $1000 to $3000 per year in property taxes. Some places in the nation pay significantly less, and some pay more. In expensive areas the tax rates are usually higher, but in certain states everyone pays the same amount. It might not be fair but it’s a cost that has to be paid every year to the state.
If you feel like you’re paying too much in taxes after you have purchased a home, you can dispute your fees sometimes even without a lawyer, if you find out that people with identical homes are paying less in your area, or you feel that some of the exemptions you’re due haven’t been accounted for in your property tax bill. This process can be as simple as calling your local assessor’s office and asking what you need to do to begin the tax review process. Some homeowners who have done this end up saving lots of money every year on the amount of tax they pay, and if you end up paying a lot more than you expected when you purchased a home then it’s never a bad idea to find out if that cost is fair.
General Maintenance Expenses
Maintaining a home is what can really get costly, especially if you forget the basics of maintaining a home. Lets go over some of the expenses that you’ll end up paying to cover the general maintenance and upkeep of your home.
If you live in a location that experiences harsh climates, then your home will experience quite a punishment. Driveway maintenance, gutter cleaning and repair, roof maintenance and repair, and exterior and interior paint touch ups can be costly or time consuming. You’ll have to shovel snow or place sealants on your driveway to ensure that it can handle harsh weather without resulting in damage to your property every year.
You’ll have to maintain your yard and garden every single year that you own your property. Depending on where you live, you’ll either experience lots of growth, or have unique seasons that determine how much you (or whomever you hire) will have to maintain your yard.
Keeping the exterior of your home in great shape is also a major expense of being a homeowner. Depending on the materials that were used in the construction of your home, you’ll have more or less problems up-keeping the exterior of your property. Brick homes need expensive procedures to ensure that you don’t have any leaks. Homes constructed with clapboard or shingles need to be replaced every few years and will also need painting to stay water tight. Homes with aluminum or vinyl siding require washing or painting to keep its sleek appearance. The most cost effective type of home is usually one with aluminum siding, since it’s easier to maintain and cheaper in the long run, compared to all of the other alternatives.
Another major home maintenance expense is the upkeep of the roof. Harsh weather can result in shingles being ripped from the roof, and might require emergency repair in order to lower the risk of a leaky roof. At some point, you’ll have to replace your roof. Good roof construction and superior materials can ensure that your new roof will last for 20 years or more.
It’s a great idea to have a structural engineer or home inspector go through the home with you and help you determine when things on the property will need repair. A professional home inspector will walk you through the property and provide you with an estimate on when the appliances, roof, and mechanical systems will need repair or replacement.
In addition to the exterior of the home, you also have to keep the interior of your home properly maintained. Depending on the condition of your windows, you might have to recaulk or install a new sash to keep the elements outside where they belong. Tiles in your home might need to be replaced if they’ve become outdated, and might require grouting. Hardwood floors have to be cleaned, buffed, and refinished every couple years if you want your floors to stay in good condition.
Some homes require that major systems are repaired or replaced right away. If you’re going to stay in your home for a long period of time, at some point you’re going to have to replace them anyway. Newer mechanical systems require proper and timely maintenance, many of them needing to be checked every year. Basements and attics aren’t excluded from maintenance and upkeep costs, as these areas can often hint toward any problems in the rest of your house. Basements are problem areas that can be affected by mild or cracks, which can become significant problems if not addressed timely. Attics will need new insulation in order to properly heat or cool your home without paying an expensive heating or cooling bill. Other problems will surely arise as your home settles in, especially as a new construction.