So, you’re ready to take the leap into homeownership? That’s amazing—truly, nothing beats the feeling of owning your own space. You can paint the walls whatever wild color you want, blast your favorite music without worrying about downstairs neighbors, and maybe even landscape the backyard! Note: Research has shown that other investments (like the S&P 500) outperform personal residence real estate.
But before you pop the champagne and start making ridiculous full-price offers, let’s talk about the less glamorous side of homeownership—the hidden costs that can sneak up if you’re not prepared. We’re not trying to scare you off! Quite the opposite—we want to set you up for success with your eyes wide open. So, here are some of the key “extras” you’ll want to budget for beyond just your mortgage payment:
📝 Home Inspection: A Smart Upfront Investment
Before you finalize that purchase, make sure you get a professional home inspection. It’ll run you a few hundred dollars, but it could save you thousands. A good inspector can flag major red flags—think mold, foundation issues, or outdated electrical wiring—that you might not notice. Plus, you can use the results to negotiate repairs or a lower sale price.
🏡 HOA Fees: The Price of a Pretty Neighborhood
If you’re buying into a neighborhood with a homeowners association (HOA) or a condo with a condo board, brace yourself for monthly fees that don’t come bundled into your mortgage. These dues often cover things like garbage collection, snow removal, and landscaping—sometimes even amenities like pools or fitness centers. Sounds nice, right? It can be! But those perks come with a price tag, and in some neighborhoods, it’s not cheap. Always ask upfront what the HOA fees are and what they cover. In our experience, the HOA tends to find “violations” on your existing home not long after you move in, so budget accordingly.
💰 Maintenance: When Stuff Breaks, You’re the Boss (and the Wallet)
Unlike renting, where you can call your landlord when the toilet overflows or the fridge quits, owning a home means you are now the go-to fixer. Most experts recommend setting aside 1–3% of your home’s value annually for maintenance and repairs. Got an older home? You might want to bump that number even higher. Whether it’s a leaky roof, a busted HVAC, or just general wear and tear, these expenses add up fast. You’ll soon find that you need to figure out how to diagnose and fix (using Youtube videos) the simple things yourself.
🛋️ Furniture: Filling Up That Empty Space
A new home often means more space—and that means more furniture to fill it. Whether you’re upgrading from an apartment or just want a fresh start, remember that furniture shopping can get pricey quickly. The good news? Sites like Facebook Marketplace, Craigslist, and local thrift stores can be your best friends.
🍁 Outdoor Upkeep
Whether it’s shoveling snow, raking leaves, or mowing the lawn, there’s a lot of seasonal upkeep involved in keeping your property looking great. You’ll likely need tools like a lawn mower, leaf blower, or snow shovel—or, if you’d rather skip the sweat, you can hire a pro (just expect a higher bill). Bonus: if your dream home has a pool, deck, or elaborate landscaping, the upkeep costs can climb even more. And your water bill might be much higher if you plan to irrigate.
🏚️ Homeowners Insurance: Not Optional (and Not Cheap)
Homeowners’ insurance is a must-have to protect your investment from unexpected disasters like fire, storms, or theft. The average annual cost? Around $2,110—and with rising premiums in many parts of the country, you’ll want to shop around and budget accordingly. In higher risk states, it is much more than this! Depending on where you live, flood or earthquake insurance might also be recommended (or required).
Final thoughts:
Buying a home is an exciting milestone for you and your family—and a smart financial move when done right. But the real key to success? Planning beyond the down payment and mortgage. By factoring in these hidden costs early on, you’ll avoid nasty surprises and enjoy your new place with peace of mind.
