20 Hidden Costs of Home Ownership
Costs of Home Ownership
1. Your Heart….First Cost
Although you fix a budget for being spent on your new house, but you come across something eye catching that you can’t resist you are ready to break the limits of your budget no matter its twice or even thrice of what you decided to spend. Most of the times your decision of purchasing a house; stems from your heart instead from your mind; that is of course a hidden cost for you. Financial decisions must be head with your head keeping your heart aside.
2. Property Taxes
At times one feels the amount I am paying as rent might be paid as mortgage and; I can own my personal property. But interest and principal amount are not the only two costs that you have to pay after getting a house against mortgage. Then what you are missing? You are missing a major expense the “tax”. Check out the prevailing tax rates and add up it in your total monthly expense. If you come to know about yearly tax rate that is the most probable case then dividing this yearly expense by 12 and accumulating to your monthly expense of mortgage will give you the true picture of your expense.
Taxes are sticky upward making themselves rising more and more with the passage of time so you must have some flexibility in your budget to afford if taxes get inflated.
What adds more to your house expense budget? That’s insurance. Numerous factors effect insurance. F you think purchasing an old house can save tour money you are absolutely wrong. Insurance cost is high for older houses because poor electrical wiring and other aged things make old houses more vulnerable to disaster consequently increasing your risk rating. On more things to increase your insurance expense is your inability to make credit card payments. Insurance companies keep an eye on your credit rating.
If your house is in some danger zone like earthquake, flood or volcano you will be paying extra cost for hazard insurance.
You have to do some homework on the outlook and appearance of your house as it reflects your taste. Making your house looking attractive on the lane, a neat walkway to the house, outside lawn and flowering is another hidden cost for you that you will come to know after buying the house. Keep some space for this expense in your budget.
5. The Lawn
Growing and maintaining a lawn costs you comprising of $100 for the person hired to cut down the lawn, equally more dollars for weed killers, fertilizers and pest killers plus any extensions needed. Even in case you yourself are doing all above things still you need some equipment like weed whacker, hedge trimmers, sprinkler, rake, gloves, bucket and many more things. Decorating and maintaining your lawn has many hidden costs that don’t click your mind when you initially think of buying a house.
6. Renovation and Improvements
Don’t forget an important point while making decision concerning any enhancements or improvements in your house like deck, room renovation etc. that all these things contribute in pushing up your tax rates imposed. Keep in mind this hidden cost apart form your labor and material expense. These taxes bump up your house expenses.
Once you buy a house million unanticipated maintenance costs arise like you come to know after buying that fireplace is not working, outside chimney is not in workable condition, tube lights fans electric boxes are not performing up to the mark, cracks on floor or walls etc. need to be repaired, paint is deteriorated, doors, windows, roof needs to be fixed, toilets need to be replaced. So it’s always more and more to be done leaving homeowners grumpy.
In an apartment a single vacuum cleaner and a set of cleaning appliances is more than enough but for a house you need multiple. Gain an additional cost probably unknown to you. Further than this cost cleaning off the house consumes one more worth mentioning resource. What’s could be that? It’s your precious time especially for working people. Hiring someone to clean the house daily accumulates to your monthly and yearly budget.
You might be thinking how time is a cost being a homeowner. Yes it is. When you realize that you’re loosing too much in paying rents and start your home search it takes a lot of time.
Once you are owner now the time reserved for your family is now used up for maintain a lawn fixing electric appliances, repairing kitchen etc. You unconsciously pay a cost for being a homeowner that is hidden.
10. The Furnace and Air-Conditioning
Before buying a house make sure that furnace and air-conditioning system is upgraded and works for all the sections of a house. If the system is not properly working or if remaining useful life of furnace and air condition is short you will be replacing them in near future. So make a space for this expenditure in your budget. Fixing an old furnace becomes expensive than its actual worth. So write it off and go for a new one is the best option.
11. Wiring, Cable, Phone and Internet
When you are on your house hunting trip you visit home for few times and spend hardly 2-3 hours in that before purchasing. However once you’re done with the purchase you come to know that TV cable is out of order. Upon testing you come to know further that the reason of this disorder is because of improper size wiring or wrongly connected wires. Now you have to call an electrician and may need new wire or cable even.
It’s also possible that phone and internet are not working properly and you have to put a complaint for that. So be prepared for such costs apparently hidden.
We all think do-it-yourself is accost effective to do the things. But the opposite side of the picture depicts that when we save cost of labor by doing tasks ourselves, we pay this cost when you ruin the stuffs like machinery or materials we purchased.
13. Extra Stuff the Man Finds
Your eye catches kitchen shelf doors need to be fixed. When you call up a professional to fix it he tells you that your terrace wood is round dead and your kids may fall and so on. The more and more defaults his professional catches the more and more it increases your cost.
Extra expenses increase when you have to add certain things for certain purposes like alarm system, motion detector and lighting stuff.
15. Pest Control
Once you start living in a house you will start looking cockroaches, mice, termites, bed bugs or pest craze. Definitely you have to pest controls otherwise your furniture or kitchen boxes will be ruined forcing you to be replaced.
Mostly people think they are saving money through energy savers and programmable thermostat. But to save you have to spend even more on buying these things as they are not necessarily installed when you buy the house.
To cope with power outages you need generators. Once you are done with buying it there is a probability that it needs refueling again and again. Be ready for such expenses.
Your kids may become a cause of your damage. Amazed how can they? Yes they can. Over the time period they will crash down the window, filth the walls and ruin the paint of doors.
19. Nearby Construction
Zoning laws of neighboring land should be known before building a house. The resale value of a real estate property decreases if a wonderful house is built in front of your house that damages the look of your house or hides your house.
20. Buyer Demands
Knowing all 19 point you can imagine that you can afford a house or not. Last valuable piece of advice is to spend a limited amount of money on discretionary items such as food clothing travelling etc.