Buying a new house is an important financial milestone in anyone’s life. It is one of the biggest investments of lifetime and should be celebrated. However, many people forget that the cost of homeownership extends far beyond the price you pay at the time of purchase. There are various additional expenses you should be ready to pay.
Here are 10 overlooked costs that buyers should be prepared for when embarking on their homeownership journey.
Property Tax
Property tax is a significant financial obligation that homeowners must pay annually. The amount varies depending on the location and the assessed value of the property. It is important to research and understand the property tax rates in the area you plan to buy a house and budget accordingly.
Home Insurance
Though this is not mandatory but if you are investing a premium, it makes sense to get your house insured against uncertainties. Protecting your investment with insurance is essential. This insurance covers damage to your property and its contents from various risks, such as fire, theft, or natural disasters. Premiums vary based on the value of the home, location, and coverage options. It is advisable to obtain multiple quotes to find the most suitable and affordable policy.
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Maintenance and Repairs
Owning a house means assuming responsibility for its maintenance and repairs. From routine tasks like lawn care to unexpected fixes like a leaking roof, these expenses can quickly add up. Setting aside a portion of your budget for ongoing maintenance and unforeseen repairs is a wise financial strategy.
Resident Welfare Association (RWA) Fees
If you are considering a property within a planned community or sector, there may be fees. These fees cover basic amenities, security, maintenance, and other shared expenses. Make sure to understand the RWA rules, restrictions, and the associated costs before purchasing a piece of property governed by RWAs.
Monthly Utility Bills
Monthly utility bills for electricity, gas, water, and sewer services are often overlooked when budgeting for a new house. Utility costs can significantly vary based on the size of the property, climate, and usage patterns. Consider requesting utility bill history from the seller or contacting local service providers to estimate these expenses accurately.
Adhil Shetty, CEO, Bankbazaar.com, says, “A homebuyer may need to pay several other charges, including electricity and water, municipal taxes, annual maintenance of society, and clubhouse charges (if any), which add up to a substantial amount. The furnishing cost could also run into lakhs depending on the size of your house and requirements. You may also need to pay a sizable amount to movers and packers while shifting to your new house. One must factor in these costs to avoid financial difficulties after the purchase.”
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Landscaping and Outdoor Upkeep
If your house is big and you have a garden or outdoor areas, you must consider the cost to maintain that as well. Maintaining a well-kept yard requires time, effort, and money. Costs associated with landscaping, gardening, and outdoor upkeep should be factored into your budget. Expenses may include lawn equipment, professional services, fertilisers, and irrigation systems, among others.
Home Furnishings
Moving into a new house often involves purchasing furniture, appliances, and decor to personalize your space. It is essential to allocate a budget for these items, as they can represent a significant expense. Prioritise your needs and consider buying items gradually to manage costs effectively.
Pest Control
Protecting your home from pests such as termites, rodents, or insects may require professional pest control services. Regular inspections and preventive treatments can help avoid costly infestations and property damage. Include pest control expenses in your budget to maintain a pest-free environment.
Improvement and Renovations
Many homeowners want to renovate or opt for home improvement projects to enhance their living space or increase the property’s value. Whether it’s renovating a kitchen, adding a room, or upgrading fixtures, these projects come with expenses. Plan your budget carefully and prioritize renovations based on your needs and financial capacity.
Moving Costs
Finally, don’t overlook the costs associated with moving into your new home. Expenses such as hiring professional movers, packing supplies, and transportation can quickly add up. It is advisable to obtain estimates from multiple moving companies and budget accordingly.
Purchasing a new house is a significant financial commitment, and being prepared for the additional expenses is essential for long-term financial stability.