Are you a first-time homebuyer ready to take the plunge? Before you finalize your budget for a new home, make sure you take these hidden costs of homeownership into account.
7 Hidden Costs of Owning a Home
1. Home Repairs
This is one of the biggest costs of owning a home that many people forget to factor in when they go to do their budget.
You might think that homeowner’s insurance will cover big budget items like a new roof—it likely will, but only if you need a new roof because it’s been damaged by unpreventable things like a fire or severe storm.
But don’t forget, things like that have a natural lifespan. At some point, various aspects of your home will reach their life expectancies and you’ll have to make repairs. And those repairs will likely need to be paid for out-of-pocket.
U.S. News and World Report offers this helpful list of how long you can expect your roof, windows, and more to last, which includes:
- Roof: Slate, copper and tile roofs can last more than 50 years. Wood shake roofs can last about 30 years, fiber cement shingles last about 25 years, and asphalt shingle/composition roofs last about 20 years
- Decks: Decks can last 20 to 25 years in dry areas and 10 to 15 years in areas that have more rain and humidity.
- Doors: Exterior doors made of fiberglass, steel, and wood will last for decades, or the lifetime of the house. Screen doors last about 40 years and vinyl doors about 20 years.
- Floors: This is one area that you likely won’t have to worry about with a newer house, since wooden floors can last 100 years or more. Tile floors can last 75 to 100. Linoleum lasts around 25 years and laminate floors can stand up to 15-25 years of use. Carpets, on the other hand, will probably need replaced every 8 to 10 years.
- Gutters: Aluminum gutters last about 20 years, while copper gutters last about 50 years.
- Windows: Wood windows can last more than 30 years, while aluminum windows are expected to last 15 to 20 years.
And remember—if you’re buying an existing home as opposed to building new, all of the above will already have some years on them.
Along those same lines, your appliances also have lifespans. Beyond the initial cost of purchasing appliances for your home, don’t forget to take into account that they will eventually need to be replaced (some sooner than you think).
Lifehack has a handy and easy-to-read infographic on how long your systems and appliances will last, as well as the average cost to replace them. Here’s a quick glimpse at the basics to help you get an idea:
- Fridge: 13 years
- Oven: 13-15 years
- Dishwasher: 9 years
- Toilet: 10 years
- Water Heater: 10-15 years
- Air Conditioner: 10-15 years
- Furnace: 15-20 years
Individual maintenance costs aren’t hugely expensive, but they can add up. The National Association of Home Builders suggests you consider the following routine home maintenance items (among others):
- Air Filters: these should be changed every three months to keep your heating and air conditioning systems in fine working order.
- Fireplaces: don’t forget about fireplace maintenance, even if you don’t regularly use it. You should have someone certified in chimney care take a look your chimney and fireplace yearly to make sure everything’s okay.
- Safety Features: if you have a home security system, maintaining it from year to year will come at an additional cost.
- Siding: if you have a wood-sided home, it will eventually need to be repainted. While you do, you might need to redo the window trim as well.
And, of course, there are maintenance items like new light bulbs, cleaning supplies, smoke detectors, etc.
4. Property Taxes
You may have already budgeted for property taxes, but remember that the rate can rise.
Your property taxes may go up if you make large-scale improvements to your home, thus increasing the value. Since property taxes are based on the value of your home, this would affect the amount of property taxes you pay.
Additionally, they could go up with the passage of new levies. For example, if a school property tax levy is passed to make up for budget deficits or cover the cost of a new school building, that would also affect your property taxes. These amounts are not usually astronomical for residential homeowners, but still—as a whole, property tax increases are something to consider when determining what house you can afford.
Insurance might already be on your radar if you are a renter with renters insurance. However, be sure your budget for a new house takes into account the fact that homeowners insurance will likely be more expensive.
Why? Basically, it’s because homeowners insurance covers more. Renters insurance mainly covers the things inside a property (as in, your personal belongings). In comparison, homeowners insurance typically covers the house, your property, and any other structures you may have.
6. The Great Outdoors: Pest Control and Landscaping
If you’re a first-time homebuyer moving from an apartment, it’s natural to forget about how much work goes into maintaining the landscaping of a home. There’s the mowing, the trimming, the pruning, the planting.
And let’s not forget the animals.
Even if you’re living in town, wildlife is likely going to crop up on your property. You might have to deal with things like bats in the attic, raccoons in your trash, and mice in your kitchen. Or worse, bugs—termites, ants, bed bugs, and more.
So if you’re buying your first home, don’t forget to set aside some cash for an exterminator. Chances are, you’ll need one before the first few years are over.
7. Furniture and Decorations
Another hidden cost of homeownership? Furniture. You might be planning on using your existing pieces to furnish and decorate your new place. This is an excellent idea that’s sure to cut down on costs.
However, sometimes people move into a new space and realize that they need a new couch or a longer dining table. It might be wise to budget for a few new pieces if you’re a first-time homebuyer.
Why Homeownership is Good
With all that said, homeownership can still be a good choice for you. If you dream of owning your own home, don’t let these hidden costs stop you. They’re just something to be aware of when you’re creating a budget and determining what house you can best afford.
Owning a home can help grow your wealth, build equity, qualify for tax breaks, and can be a good investment. Additionally, there are certain advantages of owning a home compared to renting. So even though there are some extra costs of homeownership, it can be worth it in the long run.
And in case you’re curious, here’s why a home can still be a good investment.
Is Homeownership Right for Me?
If you’re thinking about buying your first home, Mercer Savings Bank is here to help. We have online tools to help you monitor mortgage rates and calculate what you can afford, as well as an online mortgage application.