A lot of people have asked themselves if owning a home is more cost effective then renting. Below I wanted to include some of the factors to consider when tallying up the balance sheet of home ownership.
One Time Expenses
Appliances: Common appliances that you may upgrade are refrigerators, stoves, or built in microwaves. Also, you may need to replace a water heater or HVAC.
Furniture: Depending on the size of the dwelling you are moving from, you may need to purchase additional furntiure. Take a look at what you will need and include that in your initial costs.
Remodeling: Interested in a “fixer-upper”. Make sure to get estimates from several contractors before you seal the deal. It is easy to underestimate costs for remodeling.
Transportation Costs: Considering how much your transportation costs will either improve or degrade each year, can make a difference on how much you are willing to pay each month. Consider items like gas, tires, oil changes, or will you need another car?
PITI- Principal, Interest, Taxes, Insurance: If you have a mortgage on your home, with a fixed rate, then your payments will stay consistent. However, the property taxes and insurance are likely to change.
Exterior Maintenance: Keeping up the exterior of your home is a critical part of home ownership. You are likely to need to repair or replace the following: the roof, the clean or replace gutters, painting/repairing siding, windows, sealing decks, insulation, septic/well maintenance or waterproofing the basement. Even if you intend to do some work yourself, there is a cost to the tools (i.e. power tools, compressors, power washers, etc) needed to do the job properly.
Interior Maintenance: You will need to maintain the interior of the property which includes items like: appliances, plumbing, electrical system, flooring and paint.
Homeowner Association Fees: Depending on the neighborhood, condo or townhouse, there may be HOA fees or dues. Find out what they include and if they are monthly, quarterly or annual.
Utilities: If you are moving from an apartment or a condo to a single family home, the increase in utility costs can be significant. Check with your Real Estate Professional about getting the current occupants costs.
Yard Care: Plan on purchasing a lawn mower, yard tools, and landscaping materials. If you will not be maintaing the lawn yourself, then determine what the going rates for professional lawn care in your area will cost.
Pest Control: It is advisable to have annual termite inspections and ongoing treatments. Many companies offer a yearly termite treatment as part of a regular pest control service.
If you would like more information on the process of buying a home, you can download my free Home Buyer’s Guide Book right now. Just fill out the brief contact form below and a copy will be emailed to you directly. Don’t worry, I do not spam!
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Post by, Shannon Foster-Boline