Portland Metro/Tigard Real Estate News

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Friday, June 22, 2007

True Cost of Homeownership

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Homeownership is more than just a mortgage payment. In fact, it is more than just closing costs and down payments. Those preparing to buy their first home might want to take some possible extras into consideration when planning out their budget.


  • Annual insurance premium. Hopefully you had renters insurance before, but a house can be very different and more than likely the size of your house will be more than your apartment. Definitely shop around, it can save you a lot of money!

  • Property taxes. Property taxes are based on the value of your home, this is a major one in Oregon. There are tax breaks involved for homeowners but property taxes are still another bill you are not in the habit of paying.

  • Utilities. It's possible that you are going from an apartment to a house or condo of the same size, for instance my friends just bought the apartment they were already living in. But chances are you are upgrading in size and you want to take that into account when figuring out what your new utility cost will be. Perhaps even the heating and cooling sources are different, or maybe you didn't have them at all before.

  • Appliances. A lot of times appliances are included, but you might want to inquire during your home purchase, sometimes you show up to your new place to find out you have to spend $800.00 on a washer and dryer, maybe even a refrigerator.

  • Furniture. Going on that same assumption that you are going up in size, you are going to need furniture. While we are now living in the age of Ikea it is still an expense most people do not budget ahead of time. Even if your place is the same size you might feel the need for furniture that "matches" your new place.

  • Repair and maintenance.Before any repairs that needed to be done were a matter of calling the landlord. Not only do you have to take care of these things yourself but you have to pay for them yourself too. If you also happen to not be one of these do-it-yourselfers the costs start skyrocketing because you have to pay someone to do it. Things you never think of like the driveway need maintenance too. You will go into shock when you have to pay for your first repair. It can be hundreds just to have someone clean the gutters. All these projects you are going to save on by using your own elbow grease are going to require tools as well, and those can add up fast.

  • Yard care. You might be smart enough to buy a condo but if not you will be paying a lot in time and money for your yard. If you are used to living in an apartment with no yard, this can be the biggest expense shocker. At the minimum you will be investing in a lawnmower. Depending how you want it to look or what you'll be using it for you could also be looking at trimmers, chainsaws, blowers, pressure washers and lawn funiture. Or you could look into landscapers but what you are gaining in free time you are definitely paying in paper money.

  • Pest control. Another expense people don't discuss very often is pest control. Often they don't think to have it checked out or just don't want to pay for it but it's one of those situations where a little money spent up front can save you tons later on.

  • Remodeling. A lot of times people watch HGTV and see how "easy" it is to take a place with good potential and make it exactly what you want. Sure it's easy if you have help and bottomless pockets. Simply changing paint colors can get costly, even if you do it yourself, but how good do you want it to look? Settled for carpet when you really wanted hardwood? Don't assume you can change anything you want once the house is yours, look into the costs ahead of time. Putting hardwood into one room is in the thousands.

After you've bought your home it would be really wise to budget unexpected, or even expected costs. Set aside an amount each month that will go toward that remodel or the water main burst that you didn't see coming. You'll be so glad you did.
http://realestate.msn.com/buying/Article_kip.aspx?cp-documentid=4980274>1=10130
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