Buying a home can provide an enormous sense of accomplishment, and homeownership is a pathway to building wealth too.
But making the leap from renter to owner also carries plenty of challenges – including the responsibility of paying for numerous upfront and ongoing expenses.
Naturally, there are initial hurdles, like amassing the down payment and closing costs required to purchase a residence. After that, you’ll pay principal and interest payments on a mortgage, property taxes and homeowner’s insurance too.
But as any experienced homeowner can attest, the bills don’t stop there.
According to companies like the First American Home Warranty, there are also many additional, often overlooked costs associated with owning a home.
Here are four hidden costs of homeownership that smart homebuyers plan for and factor into their monthly budgets.
Hidden Cost #1: Home Maintenance
Depending on the part of the country where you live and the type of residence you buy, you can expect to regularly shell out money for a lot of routine maintenance.
The good news is that these expenditures are typically well worth it, as they will keep your property in tip-top shape, preserve its value, and prevent small issues from turning into major problems.
For example, your chimney may need cleaning or your gutters may need to have leaves and debris removed. You may also have to pay for a gardener to cut the grass, shell out cash to get snow cleared from your property, or perhaps pay someone to open and close your pool.
Even if you don’t pay any third parties or contractors for such services, chances are you’ll still spend money on home maintenance. Those bills could take the form of everything from buying pool supplies to purchasing mulch, potted plants and flowers to spruce up your home and give it curb appeal.
Hidden Cost #2: Home Repairs
Even new homes have things that go wrong. So all homeowners – especially new home buyers – would be wise to plan for the inevitable items that will break, malfunction or simply wear out.
You can certainly try your hand at minor home repairs. But a better strategy is to buy a home warranty from a reputable company like American Home Shield, and let the professionals deal with repair problems. Not only will the job get done right, but a home warranty can help put your mind at ease by saving you time and money.
American Home Shield’s national network of nearly 13,000 experienced service contractors say that leaks – in the pipes, showerheads or toilets – are the No. 1 problem homeowners try to fix themselves, followed by cleaning air conditioning or furnace coils.
While a good home warranty can cover everything from large household appliances to major home systems, warranties are especially valuable if HVAC, plumbing or electrical issues arise. Those aren’t do-it-yourself repair jobs; they require a pro!
Hidden Cost #3: Home Utilities
Again, your utility costs will largely be tied to the region of the country in which you live, as well as the type of property you own. Larger homes will cost more to heat or cool than smaller ones. Ditto for electrical costs.
If it’s generally hot in your state, expect to pay more for air conditioning – especially during summer months.
Meantime, those in cold climates will face higher heating bills in the winter – not to mention the added cost of installing insulation or fixing frozen pipes, both of which are potential expenses when temperatures plunge.
Hidden Cost #4: Home Upgrades
It’s never a wise decision to over-improve a house. However, as a homeowner you should keep your property fairly up to date in terms of its basic features and amenities.
That means replacing faulty windows, painting the interior or exterior of your home when needed, or perhaps getting rid of severely outdated items, like old carpeting or tattered wallpaper.
And what about appliances, furnishings and other home décor? There’s no rule that says you must have granite countertops in every bathroom or the latest sub-zero stainless steel freezer, refrigerator and dishwasher in your kitchen. But everything should be kept in good working order.
Also, if you want to maintain your home value – particularly if you think you might sell or rent your property down the road – you’ll definitely want your house to have the standard features and qualities that are comparable for similar homes in your neighborhood.
Ultimately, every homeowner discovers that homeownership requires an investment – not just of your money, but also of your time, energy and attention.
With proper planning, however, you can take advantage of smart cost-saving strategies, and make home ownership a lot less taxing too!
Disclosure: This is a sponsored post, however, all opinions expressed in this article are my own.