When you’re in the market to buy a house, there’s a good chance you’re focusing on the price of each home. After all, you’re liable to spend hundreds of thousands of dollars on your home.
But the costs of your mortgage, interest, and taxes are the tip of the iceberg. So, if you’re wondering, “How much does a house cost?” you’ll need to consider a few other expenses. Here’s a look at unexpected costs you’ll encounter in homeownership.
5 homeownership costs you’re overlooking
1. Yard installation and upkeep
When you buy a home, the cost of maintaining the yard might not be top of mind — but it should be. If you buy a new home, you’ll pay for landscaping, or else spend countless weekends doing it yourself.
In my case, I did as much work as I could on our yard to reduce installation costs. I worked on our sprinkler system and fencing, had topsoil trucked in, and scattered grass seeds. I kept the landscaping simple, but all told, it still cost us close to $2,500.
Paying someone else to do the hard work could have cost me much more. HomeAdvisor, for example, reports the average cost to install landscaping is $3,394, with most homeowners spending between $1,518 and $5,352.
Once you get that landscaping in, you have to maintain it. Buying landscaping tools like a lawnmower add to your costs. The monthly cost to maintain our yard, including the water bill, averaged around $30 per month.
2. Home maintenance and repairs
Even though I bought a newly built home, it only took about seven years before I needed to start replacing items.
While keeping the house clean and maintaining items around the house, like the furnace, can help you avoid costly repairs, little maintenance costs add up. And no matter how well you care for your home, you’re bound to face big repairs over the years. You’ll have to replace dingy carpets, repair the toilet and more.
If you plan to stay in your home long term, you’ll want to set aside money for big-ticket fixes, like a roof replacement. Remodeling Magazine put the cost of a complete roof replacement at $20,664 for 2017.
3. Higher utility costs
As a renter, I paid utilities for a property under 1,000 square feet. At the time, I was responsible for electric and gas bills; my landlord covered water, sewer and garbage costs.
Once I became a homeowner, though, I was paying all the utilities for a 1,750-square-foot home. That amounted to an extra $60 a month in utilities. If you face those kinds of extra costs, you might end up spending more than 30 percent of your income on housing.
You’re liable to run into unexpected utility costs, too. When the cable company wanted to bring DSL to my area, I helped shoulder the cost of running cable through the neighborhood and to my home.
Because it was a new subdivision, the cost was low, shared in customers’ bills over the period of a few months. But it could cost you more, depending on how far you live from the main cable line. In some cases, you could pay tens of thousands of dollars for that “last mile.”
4. Home security system
Few renters have security systems. If you want one as a homeowner, you’ll need to budget for it. You’ll likely pay an installation cost and an ongoing monthly monitoring fee.
DIY systems cost between $50 and $300 to install, depending on how high-tech you want it. Professional installation of a security system costs between $600 and $1,200, according to home security website SafeWise. Monthly monitoring costs, on average, $30 per month.
5. HOA fees
When I read my home contract, I saw that homeowners association (HOA) fees were included. The cost in my neighborhood was modest: $25 a year to help with street snow removal.
However, depending on your location and the amenities in the community, HOA dues can reach as much as $200 to $300 a month, or more, according to the National Association of Realtors. Even if you live in a single-family home, you might have a clubhouse or pool in your subdivision. A local park, walking trails, sidewalk maintenance, and other costs all add up.
So, how much does a house cost? More than you think
While you save up for your home, don’t overlook these extra expenses. At the very least, plan to spend at least two percent of your home purchase price on maintenance and other costs every year.
Set aside money each month for unexpected costs, like a broken garage door or leaky faucet. And make sure you save more money than you need for a down payment and closing costs. Moreover, don’t buy more house than you can afford. That way, you have the cash flow to help you take care of issues that crop up early on.