Thinking of buying a new home? Make sure you know about these 5 hidden and unexpected costs of home ownership. They may be more than you think.
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Buying a home is incredibly expensive — especially if you live if one of these states that have the highest median home prices.
But most prospective home owners are not aware that actually maintaining a home, once you’ve bought one, is also incredibly taxing because there are many hidden and unexpected costs that come with home ownership.
In this article, I cover the top 5 hidden & unexpected costs that you should know about — when you become a new homeowner.
1. HOA Fees
HOA fees or Homeowner Association fees, are payments made by homeowners in a community, to the Homeowners Association (HOA) for the maintenance and upkeep of common areas and shared amenities within that neighborhood.
Most home communities have an active HOA and the dues you pay typically cover expenses such as landscaping, street cleaning, pool or gym maintenance (if there is one), and sometimes security and trash removal. The fees may also be used to build up reserves for future repairs and improvements to your community as well.
HOA fees can vary widely depending on the community and the amenities provided in your development — and these dues are typically collected as a monthly fee, or payments on an bi-annual or annual basis.
So, as a prospective new homeowner, it would be wise to know much your regular HOA dues are going to be and what services they cover.
2. Property Taxes
Property taxes are payments we make to our local governments, including cities, counties, school districts, etc and are typically based on the assessed value of the property and the land in our homes.
These funds are directed towards supporting essential public services, such as schools, police and fire departments, road maintenance, parks, libraries, and other similar types community services.
Of course, it’s important to note that property taxes vary depending on the location of the property and the local tax rates — but it maybe as high as 2.5% if you live in one of these expensive cities so it’s important for you to factor this into your budget when you consider home ownership.
The good news, however, is that homeowners can often deduct property taxes on their federal income tax returns, which can help to offset some of these costs.
3. Home Maintenance & Repair
Now in this line item, honestly, you can go on forever with the different types of services you need to account for in upkeeping your home. But here are some of the major ones you’ll run into as a typical home owner:
3a. Heating & cooling maintenance.
First is your heating and cooling maintenance.
Typically your furnace & air conditioner units will require a checkup and maintenance service once a year. And as a range, these service calls can cost anywhere from $100, to $300 each time, depending on your location and the complexity of your system.
And if any repairs need to be made, that cost can be as high as a couple thousand dollars, depending on of course, the severity of the issue. So it’ll be good to make sure you have this accounted for in your yearly home maintenance budget.
3b. Roof and Gutter Cleaning
If you live in an area that is heavily populated by trees, you’ll often have leaves and branches on your roof and in your gutters. This debris and foliage will clog your gutters and impede the proper performance of your roof. Home owners typically have cleanings scheduled about once a month to have this remedied.
Again, cost and frequency of service will vary based on your area, house size and vendor selection, but it can definitely be a noticeable amount of cost — typically ranging between $85-$350, each instance.
3c. Pest Control
Then there is pest control — especially if you live in an area that is heavily wooded. Pest control service can actually be really helpful as they identify, prevent, and remove many different types of pests, including as insects, rodents, and other types of unwanted animals. If you happen to live next to a forest area or an undeveloped piece of land — it might be worth looking into pest control.
You should typically budget about $600-$900 a year for this type of service — depending on your location and vendor selection.
3d. Landscape Maintenance
For landscaping, there are 2 ways to handle this for you home.
You can either invest the money, time and effort to buy a lawn mower, blower and other lawn maintenance equipment and handle the work yourself… or you can choose to find a contractor that can do all that for you. (Either way, it always seems like it’s more cost than we imagine.)
Here is what a lawn mower, edger and blower would cost you — if you were to purchase them on Amazon currently ($611.33, May 2023). Not a huge investment, especially if you think about all the years you would be using these tools — but of course, the downside here is that it also takes some time and effort on your part to maintain the lawn.
In contrast, hiring a contract service would be more convenient, but would likely cost 2x/3x this amount, on an annual basis.
Also, for those of us that have sprinkler systems, we’ll also have to winterize them each year when the temperature drops to freezing levels, so that there is no risk of your pipes bursting because of the low temperatures — an added cost to lawn maintenance.
When you add all this up — it can easily make a small dent in your wallet.
3e. Smoke Alarm & Security System
And lastly in this category, are smoke alarms and the security systems.
These are necessary safety devices for your home and depending on how vested you are in this area, the cost for this can range from a couple hundred dollars — up to about a thousand dollars or more.
There are many options to choose from, whether it’s Simplisafe, Ring or Cove — and each security system has it’s own merits and features you can evaluate for your home security needs.
4. Long Term Home Maintenance
At number 4, these are more long term home maintenance items, that are more structural in nature. These things include:
- Roof replacement — which depending on the material and quality of your roof, can last anywhere from 15 to 30 years. But if you happen to notice signs of wear and tear or leaks, then you may have to consider replacing it earlier. And roofs are expensive — a full replacement can cost anywhere from $6,000 to $15,000 or more.
- Also over time, the foundation on your house can shift or settle, which can cause cracks or other structural damage. So, it’s important to have your foundation inspected periodically to catch any of these kinds of issues early. In the event of a major issue — foundation repair is also extremely costly, with the national average for foundation repair costs being in the area of $5,000-$6,000.
- Exterior painting also fits in this category. The exterior of your home should be painted every 5-10 years to protect it from weather damage and to keep it looking fresh. Cost depends on size of house and your vendor selection of course, but you should budget about $3-$4 per square feet of your home.
- Window replacement is also a consideration especially if your windows are drafty or difficult to open and close — which can happen after some time has past. Getting newer windows can also be a merit in and of themselves, because newer designs are typically more energy-efficient resulting in lower heating and cooling bills for your house. Average cost here is about $300-$600 per window.
- If you have a fireplace, it’s important to have your chimney cleaned annually to prevent chimney fires and carbon monoxide poisoning from occurring within your home. Luckily fireplace and chimney maintenance/service is one of the lesser costs on this list — ranging from $150/hr to $450/hr, in most cases.
- Water heater replacement is also important — every 8-12 years, before they have a chance to fail and cause water damage to your home. The cost here can vary widely depending on the type of water heater and how complicated the connections are in your home.
- Your home’s electrical system should also be inspected every few years to ensure it is up to code and safe to use. In the case of just routine inspection, the cost should be low, but if there is a major electrical problem — your out of pocket might be in the several thousand dollar range.
- And lastly, having a plumber inspect your home’s plumbing system periodically to catch leaks or other issues before they cause major damage — is also a long term home maintenance item. The cost here, again, would very widely on the type of plumbing issues found in your inspection.
5. Home Cleaning
And the last hidden cost of home ownership is home cleaning.
We are all busy with our lives and sometimes we might not have the time or effort needed to clean our homes on a regular basis. This is when hiring a home cleaning service can be immensely beneficial. While some people might feel that paying an external party to clean your own house might be excessive, there are several reasons why going this route might actually be worth the cost.
- First, hiring a cleaning service obviously frees up your time to focus on other important tasks or to simply relax and enjoy your home.
- But in addition, it also offers consistency in cleaning, because professional cleaners have a system in place to ensure that every part of your home is cleaned thoroughly with the same level of quality. This can help keep your home looking and feeling clean and organized on a regular basis.
- Also, cleaning companies have trained and experienced cleaners who know the best cleaning techniques and products to use for different types of surfaces and materials. They also have the necessary equipment and supplies to clean your home effectively — which can provide peace of mind and assurance knowing that your home will always be cleaned correctly and efficiently.
So there you have it — the top 5 hidden costs of home ownership. I hope you found this info useful, and just to make it easy for you — I’ve actually put together a quick and simple checklist for you to download, that keeps track of all of the items I just mentioned in this article. You can download it, absolutely free, by clicking here.
Of course, it’s obvious that none of these incremental costs should deter you from purchasing a new home, but just make sure you keep these things in mind, as you decide to venture into home ownership.
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The content here is strictly the opinion of Daniel’s Brew and is for entertainment purposes only. It should not be considered professional financial, investment, or career advice. Investing and career decisions are personal choices that each individual must make for themselves in accordance with their situation and long term plans. Daniel’s Brew will not be held liable for any outcome as a result of anyone following the opinions provided in this content.
