Buying a home is an exciting part of life, especially if you have been renting for a long time or newly married looking to start a family. Many things come with homeownership, pride in owning a home, building value in home, and stability. But what isn’t mentioned that comes with a home is the additional cost of owning one. I am not talking about paying the mortgage, yet that is a large portion of the costs associated, I am talking about all the other expenses and there are quite a few.
Costs of Owning a Home
For starters you will be required to carry home owners insurance on your home. The cost will vary depending on many different factors like; size, age, value, area of town, etc. The cost can vary from several hundred dollars to over a thousand.
With homeownership come property taxes and are based on the value of your home. The more your home is worth the more your taxes will be. Again you are looking at potentially thousands of dollars a year.
You are probably familiar with paying utility bills, however when you buy a home there are additional bills to pay and they are typically higher than if you were renting a small apartment.
Common utilities include:
Water
Sewer and trash
Electric
Natural gas
The costs of these typically average out to $2,000 or more a year, of course depending on where you live, the size of your home, and the number of people living in the home you could well exceed this average. This doesn’t take into account phone service, cable television, or any other amenities you may desire, tack on another $1,000 a year for those.
Repair and Maintenance Costs
Homeownership is like any major investment you are going to have to continue to contribute to it. When you own a home you will need to be able to put money into as needed. One early January morning you may wake up freezing because your furnace is on the fritz. You may get off lucky and it only needs a replacement part or you may end up having to replace the appliance altogether. These types of things should be anticipated before buying a home and planned for accordingly. Not only do the appliances need to be kept up in the home but the exterior things as well. Consider what it will cost you to maintain a yard year round and paint the outside every few years.
Costs of Setting up a Home
Remember that when you buy a home you may have to invest in some appliances such as a washer and dryer or a refrigerator. Depending on your taste and your needs that can be well over $1,500. If you have never lived on your own or accumulated certain necessities you may need to invest in kitchen goods, furniture, and other goodies.
If you are used to renting, many of the costs of homeownership can be overwhelming. Owning a home takes a bit of work and the cost can add up quickly so be sure to understand just how deep you are getting in before you decide to take the plunge.
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