The Real Costs of Homeownership

Verani Realty

couple looking at budgetIf you are ready to buy your first home, you probably sat down with a mortgage lender and determined your budget. That is the first step. But, you probably are wondering about all those other hidden costs that come along with actual ownership.

Renting may have some similar monthly expenses, like electricity and cable, but there are other variables and additional things like maintenance that you may not have experienced before. What will it really cost you each month once you own?

The following is a breakdown of the basics, though your individual household needs – and even your geographic location – can make it vary.

Basic monthly costs to expect as a homeowner

Across the United States, costs vary greatly. Cities along the West and East Coasts are among the most expensive. Monthly costs for things like heating and cooling are affected by the home’s efficiency level as well as local price points. But here is a basic idea of how to budget for key items:

  • Electricity: As a renter you probably had this bill, but if your new home is supplied by a different company, the usage rates may be different. Also, homeowners tend to have more square footage to illuminate. For example, perhaps your apartment had one lamp in the bedroom, versus your new house with 4 inset lights in the ceiling. Homes also have outdoor lighting that can add to how much electricity is used each month. Expect bills in an average range of $80- $175.

  • Oil/heat: Heat probably was a bill you had as a renter, but your new home is probably larger and requires more to keep comfortable. Budget an average of $150-$175 per month annually, realizing this will vary depending on the current cost of fuel and the temperature you set on your thermostat.

  • Trash pick-up: This can either be part of your town services, where it is paid for by your local taxes or bags you must buy, or you may have to hire a service for pick-up. Expect it to cost about $35 per month if it’s not covered by your tax bill.

  • Home repairs: Gone are the days of calling your landlord for repairs and upkeep issues. The rule of thumb is that annual repair costs can be about 1% of the price of your home. Many aspiring homeowners underestimate — or simply fail to consider — the potential costs of necessary home repairs. Repairs are vital to the safety and comfort of your family (think repairing a broken furnace in the dead of winter), but they also ensure your home maintains its value.

  • Maintenance: Your home ages and needs to be maintained. This means staining, painting, cleaning gutters, landscape work, servicing of the pool if you have one, etc. Budget about $50 -$80 per month average, depending on the scope of the work that is needed.

  • Cleaning systems: For example, your septic (if a private tank) needs to be pumped. How often tends to vary based on the size and number of people in the house, but expect it to cost about $250 to get it done. Other items include the annual servicing and cleaning of your furnace, which can run you about $175-$200 each year.

There is a bit more to owning a home than the basic costs you learn about when you go to buy. Monthly expenses go beyond mortgage, taxes, and insurance, so it pays to plan and budget for everything before you sign on the dotted line.

Previous PostNext Post