Renting has the advantage of carefree freedom, but it doesn’t offer the same investment opportunities than buying a house.
However, many people are unprepared and they are often taken aback with costs involved with maintaining and repairing a property. Often these additional costs catch first-time buyers by surprise and they are not ready to take on these financial responsibilities.
This list contains home costs that first-time homeowners often overlook and by making sure that you are prepared for them, you can make the transition from renting to owning a lot smoother:
#1 — Unanticipated property taxes
Without a doubt, adding property tax into your household budget is a must, but many homeowners don’t always prepare for the annual tax increase.
Home buyers should also remember that they will likely pay property tax on any new installations like adding on a bathroom or a deck or renovating a kitchen. Over time, this will also increase one’s property tax.
#2 — Interior space considerations
Moving into a house from a rental unit means double the living space – and with more space comes more rooms that need to be filled up.
You don’t necessarily have to decorate, buy new furniture, acquire accessories or stock up on cleaning supplies at the same time, but you do need to take into account that you are going to have to maintain the additional spaces and this will require time and money.
Even though you are excited about the new possibilities, you need to remain realistic and ought to calculate these extra costs into your budget.
#3 — Additional insurance coverage
Homeowner’s insurance might seem like a pretty basic yet necessary thing to do, but there are a number of things that could make it skyrocket.
If you are buying an older home, for example, the coverage of the plumbing and electrics will add up. And in the event that you’re living within a natural disaster zone, things might require even more insurance policies.
Research all your options correctly and make sure that you chose the best one.
#4 — Unexpected home repairs
An inspection is a good idea to make sure that the house is in good condition, but home buyers fail to plan for unexpected problems.
A roof leak or creaky steps might only rear their heads after papers have been signed. Try to put away at least 1% of the home’s purchase price for unexpected repairs.
#5 — Outdoor maintenance costs
It is always a good idea to have a neat garden with curb appeal but this all comes at a cost.
Whether you want to DIY the garden or hire a landscaper, you are either going to pay for the tools that you need or the service that is being produced. Plus, you will have to factor in the maintenance costs over time.
#6 — Increased time investment
A home is an investment and over time it might deteriorate, which means it requires constant upkeep and maintenance in the form of remodelling or repairing.
So, the investment can be well worth it over the years, but don’t forget about the effort and money that has to go into it so that it can remain in fantastic condition.
#7 — Updated safety improvements
Safety features on rental units are often calculated into the monthly instalment, but homeowners are responsible for maintaining their own safety upgrades.
While you may be happy with the features at first, you may want to change the locks or install an alarm with motion sensor lights once you have settled in!
Make sure that you know exactly how much this will cost before you make the commitment of buying the house.
#8 — Preventative pest measures
You can’t phone the landlord anymore if you have roaches or rats crawling around.
In other words, you will have to phone pest control and the cost of eliminating them will fall directly on your shoulders.
Routine maintenance might be a good solution to avoiding them, but no one can prevent the unexpected!
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