4 burdensome costs of owning a home
Owning a home is great, but the expenses related to the upkeep and maintenance can become a burden on your wallet. It's best to be prepared for the cost of homeownership and in most cases expect that the following expenses can pop up (or increase greatly) during your first year as a homeowner:
1. HOA/condo fees
It never fails. You move in and maybe you have a general idea of what the condo fees are. But you missed the most recent HOA board decision to hike the fees, and you end up with a higher bill than expected. This can be disconcerting, especially if the increase is significant. Try to budget a higher amount because HOA/condo fees in this market are prone to increases given the high delinquency rates and the need to keep reserves high.
2. Property taxes
The same applies here, except property taxes are much higher than HOA fees. If your home's value increases significantly, then you can expect the taxes to follow along closely during the next assessment period. Alternatively, should the value go down, then you may or may not see a reduction in your property taxes. Municipalities are generally reluctant to reduce property taxes in response to a reduction in value; however, this isn't true for all. If you feel that you've been unfairly assessed, then call the local assessment office to discuss your options around disputing the bill.
Depending on the size of your home, this can get expensive. Our first home cost us $20 every two weeks to cut the front lawn. However, other homes in our neighborhood saw landscaping costs soar to $100 every two weeks due to the intricate and detailed work needed to keep the lawn pristine.
4. Maintenance and repairs
This is where the cost of homeownership can get ugly. If your AC breaks down or the furnace fan goes on hiatus during one of the coldest days of the year, then you're looking at a hefty bill. Ask me how I know! The latter--furnace fan breaking on the coldest day of the winter--cost over $500 to fix. When it's literally 40 degrees in your house, you're willing to pay whatever to get the heat back on. In this case, our home warranty didn't cover the part, so we were stuck paying for parts and labor to replace the fan.
Other expenses come up as well, such as needing to replace the garbage disposal or repair water damage to the cabinets as a result of the broken disposal. The list goes on and on, so it's best to be prepared with a home repairs fund to cover any unexpected expenses.
Do any of these expenses ring a bell with your wallet? I'll never forget looking at the bill for the furnace fan, but it taught me a lesson to be prepared for the worst as it relates to random repairs that pop up. We changed warranty companies that year to cover the part should it happen again.