The Hidden Costs of Owning a Home: 4 Expenses to Keep In Mind

Everyone knows about mortgage payments, but there are additional costs of home ownership that buyers should anticipate when calculating their budget. Known as “the hidden costs of owning a home,” these expenses are often overshadowed by the initial purchase price, and these bills for new homeowners can be a nasty shock if they haven’t planned ahead. To help prepare you for the cost of owning a house, we’ve compiled a list of four common costs of owning a home that go beyond the property sticker price.

Four Additional Costs of Home Ownership

1. Maintenance and Repairs: One of the most significant hidden costs of owning a home is ongoing maintenance and repairs. Whether it’s fixing a leaky faucet, servicing your HVAC system, or replacing a roof, these costs can add up quickly. Experts recommend setting aside 1% to 4% of your home’s purchase price annually for maintenance. This means if your home costs $300,000, you should budget $3,000 to $12,000 each year for upkeep.
2. Property Taxes: Annual property taxes are another major cost of owning a house. These taxes can vary widely depending on where you live and are subject to change as property values and municipal demands evolve. In Alabama, while property taxes are relatively lower than in many other states, they still constitute a significant part of homeownership expenses. Learn more about property taxes in Alabama.
3. Homeowners Insurance: The cost of homeowners insurance has risen significantly, with rates increasing by double digits in recent years. This insurance covers potential damage to your property and can vary depending on your home’s value, location, and the coverage level you choose.
4. Utilities and Services: Utility bills for energy, water, and waste collection are unavoidable expenses of owning a home. Additionally, services like internet and cable, though optional, have become essential for many households, adding to the monthly costs of owning a home.

Avoid Home Costs Surprises with Early Planning

Budgeting ahead for the annual and monthly expenses of owning a home is crucial. It can prevent financial strain and ensure that your home remains a blessing, not a burden. The dreaded “buyer’s remorse” is often triggered by the unexpected cost of home ownership - don’t allow that to happen to you! Consider these hidden costs when planning your budget, so you can enjoy your home without financial surprises.

Alabama Is One of the Most Affordable States for Homeownership

According to a recent study by Bankrate, Alabama boasts significantly lower home ownership costs. The state’s favorable property tax rates and generally low insurance costs make homeownership more accessible and sustainable. This affordability, coupled with the charming environment and communities within the southern state, are just a few of the compelling reasons to give Alabama a closer look if you’re looking for a new home.

If you're considering buying property in Mobile, Alabama, and want to get a complete picture of the cost of home ownership, Leslie Davis and her Key Performance Team are here to assist you. KPT’s expertise can help you navigate the complexities of real estate transactions and prepare for all aspects of owning a home. Contact KPT for a home-buying experience that’s smooth and worry-free!