Buying a home is a significant investment. While you may be in a position to afford the monthly payment for a house, especially with today’s low-interest rates, you do need to be able to pay for a host of other things a home will require. Today we’re going to explore some of the many expenses that come with homeownership.
Let’s take a look at some of the real expenses a homeowner pays as part of their commitment to owning a home.
Homeowner Expenses
Utilities
Several items can fall under the utility umbrella. Utilities are generally services that the house needs to run.
Water
The house needs water for toilets, sinks, laundry, etc. Sometimes the water is required for your landscape irrigation unless your irrigation water is provided separately—more on that in a moment. Water is generally provided by the city in which the house resides and is billed based on usage.
Sewer
Most homes within the city limits are on the city’s sewer system, and charges are generally based on the property’s size. Of course, if you have a septic system, you won’t have to worry about paying for sewer usage.
Trash
Another necessity of any home is trash collection. A provider contracted by the city provides trash collection, so homeowners can’t shop around for service. While the homeowner does decide how many trash bins they’ll need, the billing is paid directly to the city.
Electricity
Idaho Power is the electric provider for Idaho, and fortunately, a lot of the region’s power is hydroelectric. As a result, electrical prices are incredibly reasonable in comparison to other states. Power bills are calculated based on consumption. Having energy-efficient appliances and LED lights can help lower costs. Not surprisingly, air conditioner use during the summer months is responsible for increased consumption.
If the house is connected to natural gas, that’s another expense that will have to be accounted for in monthly costs. Gas can be used for heating and cooking and, in some instances, for laundry purposes. Gas prices tend to rise in the winter months and lower considerably during the spring, summer, and fall months. Like water, gas is billed based on usage.
Gas
If the house is connected to natural gas, that’s another expense that will have to be accounted for in monthly costs. Gas can be used for heating and cooking and, in some instances, for laundry purposes. Gas prices tend to rise in the winter months and lower considerably during the spring, summer, and fall months. Like water, gas is billed based on usage.
Internet
In today’s connected world, having the Internet at home is vitally important. While considered to be an optional expense, Internet access is increasingly required in today’s homes. Smart devices, telecommuting, online education, and even streaming entertainment require Internet access at home. Depending on the download and upload speed, homeowner needs will dictate how much a month this service will run.
Services
Various organizations provide services to help the home function or provide additional comfort to the residents. None of these are necessarily required but may be needed or required.
TV Service
With lots of people cutting the cord, traditional television service is quickly becoming a relic of days gone by. For people who aren’t comfortable with today’s streaming technologies or perhaps live in an area where Internet service is poor, TV service may be necessary. Between traditional cable and satellite providers and the various programming packages, the cost varies greatly.
Phone Service
Are you going to have a traditional landline or use a cell phone? Some security services (see below) may require a landline for their operation. Some landline providers argue that in the event of a disaster, cell phones may not work, and having a landline is a lifeline.
Home Security Monitoring
A lot of security monitoring services are relying on Internet access to protect the home. Some services still require a landline if Internet access doesn’t work or the power to the house is cut. While not required, having home security can provide peace of mind and earn a break on homeowners’ insurance.
Homeowners Insurance
If you have a mortgage, this will be a requirement of the loan, and this expense is included as part of your monthly mortgage payment. Even cash buyers would be wise to carry homeowners’ insurance in the off-chance calamity were to happen.
Landscape Maintenance
Some people find peace in mowing their lawn, trimming their hedges, or maintaining their gardens. In contrast, others would rather pay someone to take care of the yard maintenance. Homeowners that fall into the latter category will contract with a company to perform the maintenance.
Sprinkler Blowouts
Some landscape companies provide this as part of their service. For those that take care of their yards, blowing out the sprinklers at the end of the season is essential to avoid damaging the home’s irrigation system due to frozen lines.
People who own compressors can blow out the lines themselves and save some money in the process. For those who would instead leave that to the pros, sprinkler blowouts generally start around $25 and get more expensive based on the number of zones.
Regular maintenance on a home’s heating and cooling system is essential for optimum operation, efficiency, and safety. At least once a year, a homeowner should have their air conditioning and heating system serviced. Service calls vary in price but doing routine maintenance on these machines can help prevent costlier repairs down the road.
HVAC Service
Regular maintenance on a home’s heating and cooling system is essential for optimum operation, efficiency, and safety. At least once a year, a homeowner should have their air conditioning and heating system serviced. Service calls vary in price but doing routine maintenance on these machines can help prevent costlier repairs down the road.
Trash Bin Cleaning
Trash bins can get rather ripe and really should be cleaned periodically. Yes, the homeowner can do this on their own, but some services use specialized equipment to completely clean and sanitize the trash bins. Rates will vary depending on the number of containers and the frequency of the service.
Other Repairs
As homes age, additional repairs or replacements may be needed. Patching concrete, fixing the roof, taking care of plumbing issues are all expenses that may need to be taken care of someday. Ideally, being able to set aside funds for such problems would be ideal.
Taxes and Dues
If you own property, taxes and association dues will be part of your homeownership budget planning.
Property Taxes
While most property taxes are paid as part of your monthly mortgage payment, if you don’t have a mortgage (e.g., you bought a house with cash), you’ll need to set aside funds to cover the biannual tax payments.
Irrigation District Taxes
If your home’s yard uses irrigation water provided through a community or canal, you’re going to have to pay taxes to the irrigation district that is providing the water. Some areas may have multiple taxing districts. Unlike property taxes, these taxes are not included as part of a mortgage payment.
HOA Dues
Homeowners Association Dues can be paid monthly, quarterly, or annually and required in communities with a Homeowners Association. The association pays for the neighborhood’s maintenance and upkeep, which can include common areas, pools, playgrounds, etc. HOA dues are not optional if you decide to move into a community managed by an HOA.
The Last Word
As you can see, buying a home is not just about the mortgage. Many other things are necessary expenses that need to be accounted for in your housing budget. Work with a REALTOR® and get pre-qualified by a mortgage lender before starting your home search.