What are the 3 most overlooked home expenses?
Q: I’m buying a home after years of renting, what are the new expenses I need to be concerned about ?
-Patricia, North Bergen, NJ
A: That’s a good question, Patricia. I’m a big proponent of home ownership, there are many benefits that make it worthwhile, however, there are expenses that you’ll have to begin taking care of when you buy a home. Here are the 3 most overlooked real estate expenses:
1. Property Taxes
Property taxes can be demanding because even if you’ve paid off you mortgage, you still owe what amounts to a monthly fee to the town or the municipality in which you reside. Remember, the bank doesn’t decide your property tax, the town or city where your property is located does so make sure you account for it in your budgeting.
2. Property Maintenance
It’s true there are many advantages to owning real estate, but the asset itself has to be maintained to retain its highest value. So property maintenance is the 2nd most overlooked home expense. Make sure you put money aside for property maintenance—if your home was newly built or recently renovated then you don’t have to put aside as much as you will for an older house or a house that has not been renovated recently. Two pricey items to focus on for property maintenance are your roof and your heating and cooling systems.
Personal liability is something that people often overlook when they rent. If someone slips and falls on your property, you could be sued personally. There is also the risk of flood, fire or natural disaster. So, insurance is the 3rd most overlooked property expense and I strongly suggest that both you and your property are adequately insured to protect your investment. Thanks for your question, Patricia. For more real estate tips and information, visit performanceproperty.com. I’m Gerald Lucas and I’ll see you again soon.