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Planning for Unexpected Homeownership Expenses

In today’s real estate market, you might hear it’s cheaper to buy a home than rent property. While cost comparisons often favor a mortgage payment, homeownership comes with additional expenses beyond insurance and closing costs.

Over time, everything from HVAC maintenance to yardwork adds up. According to a study conducted by Zillow and Thumbtack, these “extras” can amount to over $9,000 per year, with some homeowners spending up to $16,000 per year.

To avoid buying a home before you’re ready, budget for the following factors.

Maintenance

This general expense covers anything from carpet cleaning and power washing to yard upkeep and clearing out the gutters. Depending on the season, maintenance may involve:

  • Resealing the driveway
  • Refinishing the deck
  • Repairing the roof
  • Taking care of cracked pavement
  • Repairing the front steps
  • Updating appliances, including the water heater
  • Fixing leaks and plumbing issues
  • Replacing HVAC system filters
  • Sealing doors and windows
  • Repairing the chimney
  • Patching the walls
  • Repainting the walls
  • Replacing carpets
  • Re-grouting any tile
  • Pest control

Utilities

As a renter, how much was your electric bill? While your landlord might have covered costs related to heat, hot water or gas, a homeowner needs to factor these into annual expenses. On average, a homeowner pays about $2,964 on utilities per year.

HOA Fees and Property Taxes

If you live in a gated community or condo complex, you pay a homeowners’ association fee for grounds maintenance and other community developments.

Along with this expense, you will also pay property taxes. When your town or city reassesses the property, the cost will likely increase. Especially if you live in a desirable area, this amount may rise sharply, catching some homeowners off guard.

On the subject of taxes, any improvements you make – building a deck, patio or expanding the house – will affect your property taxes. This does not factor in the materials and labor required to complete the project.

Lawn Care

If your home has vast grounds, lawn care becomes a separate expense from maintenance.

Essentially, you have two options. One, work with a professional for lawn upkeep – an expense of about $100 a month, on top of supplies. Two, do the landscaping yourself. In this case, the costs add up in other ways. The purchase and maintenance of all equipment – a lawnmower, weed whacker, hedge trimmers, sprinklers, a hose and basic tools – plus a garage or shed to store it all.

Day-to-Day Cleaning

When you rented, a bottle of all-purpose cleaner, paper towels, a mop and broom helped keep your apartment clean. The greater square footage of a house will require more supplies – not to mention the manpower needed to do it all. Some homeowners decide to pay a separate cleaning service but if you do it yourself, supplies and upkeep can actually become a greater expense.

Safety and Emergency Preparedness

One risk of homeownership is having your belongings damaged in a fire or stolen by a thief. For these potential emergencies, budget for the following:

  • All emergency supplies, depending on your area. Storms can knock out power for days, so you may want a generator on-hand, which can cost as much as $10,000.
  • A security system. Smart home technology makes it easy to integrate devices, but you will need to invest in an alarm system, camera and motion-detector lighting.
  • Flood insurance. Homeowners policies explicitly exclude this peril, so you will need to pay for separate coverage – especially if you live in an area prone to flooding.

Additionally, make sure you have enough insurance coverage. To review your homeowner’s policy or add a rider, give us a call at (800) 801-8013.