Owning a home can be a great long-term investment. While owning a home and be a great long-term option, it can also be very expensive. While most people can predict their mortgage, insurance, and utility expenses, there are some hidden expenses that are harder to predict. There are three hidden costs of home ownership that need to be considered when making a budget for your home purchase.
Major Repairs and Replacements
One of the biggest expenses that can seem hidden when you buy and own a home are the costs associated with making major repairs or replacements. Over time, all parts of your home will need to be either repaired or replaced. This can include replacing your roof, servicing your HVAC system, fixing plumbing problems, repairing windows, or replacing home appliances. While it would seem like these repairs wouldn’t occur too frequently, you will likely be making them at least once every few years. To ensure that these expenses are properly covered, most experts recommend that you save at least 2% of the home value each year to cover these costs.
While it is necessary to make certain repairs to your home over time, there is also a strong likelihood that you will want to make home enhancements as well. Since your home is such a big investment, you will likely want to ensure that it stays modern while you were living there. This is particularly important when you are looking to sell your home and get the best price. If you are trying to keep your home modernized, there will be a cost every few years to make certain upgrades. Projects can vary from painting walls, to replacing carpet and tile, to remodeling kitchens and bathrooms. Depending on which projects you choose to pursue, this could be thousands of dollars per year.
Another hidden cost that is often underestimated by homeowners is the cost of maintaining a lawn. The size of your yard will determine the amount of money that you spend on mowing, fertilizer, sprinklers, and other lawn care projects. You may also choose to put in a garden, which requires time and effort, seeds, and fertilizer. If you choose to hire a company to care for your lawn, it can get even more expensive. It is possible to save money on lawn care, so make sure that you have a plan in place to maximize the service you get for your money.
In conclusion, owning a home can be a great long-term personal and financial decision. While there are clear benefits that come with owning a home, there are also many costs associated with it. When preparing your budget for buying a home, there are three hidden costs that need to be taken into consideration.