Owning a home is a right of passage to many people, allowing them to feel like they’ve reached the American dream: unfortunately, it’s extremely expensive. Although home prices themselves have skyrocketed, the cost of owning a home is so much more than the structure itself.
These are the reasons buying a home is more expensive than you may assume.
Maintenance
From dealing with a roof replacement to handling a minor flood, being a homeowner can get extremely expensive. Most maintenance costs are the upfront news to buy machinery or appliances. This could mean getting a lawnmower because you have a yard now, or it could mean having to pay for a new fridge because the property didn’t have one yet, but it all adds up.
From repairing fences to getting your dishwasher fixed, so it doesn’t flood your walls, it’s vital that you maintain your home, but it’s also extremely expensive. As a renter, these aren’t costs that usually weigh on your shoulders.
The Expenses of Buying
The act of buying your home itself is expensive! Although you may think the only thing you have to worry about is the downpayment, you have dozens of other costs besides that, from the inspection to the cost of having a realtor, taxes, the cost of escrow, and so much more.
Although buying your home is pricey, there are dozens of other costs that pile up above that and make the purchase prohibitively expensive.
The Taxes Every Year
Every year you need to pay taxes for the land your home is on and the value of your home itself. This varies in cost depending on the property, city, and state, but it generally sits between one to two percent of your home value.
This could seem like a small number until you remember the average home is around $500,000 right now. This means property taxes can cost between $5,000 to $10,000 a year for a home at this cost.
Many lenders will let you fold that into your monthly payments, but it’s still a high expense that’s hard to swallow.
HOAs Are Everywhere
Homeowners’ associations are extremely prevalent in most cities. For their work to keep property value down, you have to pay them every month or year to protect your property as well.
If you fail to pay, you could be out of your home and removed from the property despite being the person who bought it.
They require everyone to keep their lawn and home exterior to a specific look, and it’s hard to accept that if you like keeping things a little wild. Unfortunately, any deviations from the straightforward and beige could lead to high fees.
HOA fees aren’t regulated and can go anywhere from $25 a year to $500 a month, so don’t be surprised if you see high numbers.
Being a Homeowner is a Bank Breaker
Although it can be nice to live in a home you own, and in the end, you build value into it that you can cash in on, there’s no end to the costs that come with owning a house. Make sure to budget carefully for anything when you’re considering buying.
