When Jordan and I decided to buy a home we were well aware that this was going to be an expensive endeavor. We talked about different scenarios, calculated the costs of purchasing, and made sure to only look at homes within our budget so we wouldn’t completely wipe out our savings account.
We were mentally prepared to make that big transfer of cash when we finally closed on our cute little home. While nearly all of our savings was wiped out, we figured that we’d just cut back on expenses for a couple of years and build that savings cushion back up.
We excitedly walked through the house. It was OURS. We couldn’t believe that after searching and saving for years, the process was finally over.
That excitement and novelty wore off rather quickly as reality set in. We bought it as a home for us to live in — eventually — but decided to rent it out while we continued living in London. We were home for just a week and in that time we needed to make any updates to get it move-in ready and find renters.
We hopped in the car and headed to Home Depot, and that’s when it began to sink in that we were nowhere near done spending money.
Before I get into all of the extra costs that threw our savings plans out the window, I want to say that I do love our house. Really. It’s cute, charming, and in a neighborhood we really like. Was it a good financial decision to buy? I don’t know. I hope so, but only time will tell. But I think a lot of stress could have been avoided if we realized how much homeownership would really cost. Hopefully, this article will help you prepare for some of the extra costs that come along with this really big purchase.
Move In Updates:
Right after we closed, we looked around our house and were thrilled. It was ours! About 30 minutes later, we started noticing all of the things we didn’t see prior to closing. We were lucky that the house had been vacant for six months while being updated (new kitchen, bathrooms, refinished floors, new painting inside and out), but there were still quite a few things that needed to be done before we spent any money on moving in or buying furniture.
Here’s just a snapshot of what we purchased that first weekend of owning our house:
Shower door: that bathroom that had been completely updated and we loved? Somehow we missed that the new shower didn’t have a door. So we promptly put that on our list for our first Home Depot run. (approximately $200)
Window treatments: one of the things we loved about the house when we viewed it was all of the big, beautiful windows letting the light in. As we stood alone in our living room we realized that those big windows all over the house would need some kind of covering because anyone on the street could see in. We only bought blinds for the bedrooms and bathrooms and saved the rest for when we decorated. These were surprisingly expensive (approximately $400)
Washer/dryer: we were fortunate to move into a house that was recently updated, so all of our appliances in the kitchen were new. But we soon realized that we didn’t have a washer/dryer in the house, so we needed to purchase those. (approximately $1700)
Water heater: the water heater that came with the house was in good condition, but had been perfect for the single man that lived in the house before us. It wasn’t large enough for 2+ people needing to shower in the morning, so we replaced the water heater for a larger one. (approximately $500)
Faucet: a couple of days after closing we realized that the faucet in the kitchen wasn’t getting hot water. After determining it was a faulty faucet (the kitchen had just been remodeled), we quickly checked our warranty to see if it would cover the faucet. Out of luck, we paid for a new one. ($150)
Attic screens: during the home inspection it had been noted that some of the screens in the attic had been removed. Not wanting to invite pests into our home, we quickly replaced the screens ($50)
Alarm system: the house came with an alarm system already installed, but it was pretty out of date. We decided to upgrade the system so we could take full advantage of the monthly monitoring packages. ($350)
Smoke and carbon monoxide alarm: I was a little surprised by this one. We hadn’t even thought of needing these alarms . When we realized that the house didn’t have any installed, we were surprised by just how many we needed. ($200)
Motion sensor lights: when the alarm company came out to update our alarm system, they also suggested that we install motion sensor lights outside of the house. Another trip to Home Depot. ($100 )
Changing locks and extra keys: always a good idea to do this when you purchase a home. As our house had just had work done, we didn’t know how many different people had keys to our home. ($150)
Garage door opener: this one was a funny one, but I’m really glad we did it. The garage door opener that our home had was older and didn’t have the rolling code technology that newer garage door openers now have. It’s really easy for people to break into your home with this type of door opener, so we quickly replaced it. ($150)
That first week of owning our home cost $4,000.
Since we’re talking about maintenance, I should probably mention the few extra costs that we started paying for monthly, almost immediately. Our home is fairly low maintenance – we don’t have a large yard and we live in a really temperate climate so there’s not too much seasonal maintenance required. But there were a few things that added to our monthly home costs:
Gutters: We get our gutters cleaned out 2 times per year. ($400 per year)
Pest control: We’ve had one terrible run in with pests that cost a lot (more in the section below), but now we just use pest control services to take care of ants, get the spiders from our very high skylights, and make sure that things aren’t getting out of control. ($45/mo)
Monthly alarm: As part of our updated security system, we pay for monthly monitoring. ($35/mo for peace of mind)
Landscaping: We basically have no yard, just some bushes that need to be trimmed once a month. Some quotes came back as high as $500, but luckily we found someone who was more reasonable. ($150/mo)
Extra monthly costs: $265/mo
The big stuff:
As a homeowner, they do say to be prepared for the big things that can happen to your house. For the first year, other than what is listed above, we really didn’t have that much that needed to be done. Thankfully. There were small things here and there, which I honestly didn’t keep track of, but nothing major.
And then, we had major things happen. All at once. Which almost made me cry and want to sell our home.
Rodents: First, I want to state that our home is clean, our neighborhood is nice, and we didn’t see this coming. But the city did some work on sewer lines and all of a sudden our neighborhood and the neighborhoods around us had a rat infestation. It was BAD. And when whole neighborhoods have this issue, pest control companies get really busy. It took a month, three different companies, and a lot of money, but we finally solved the issue. Knock on wood the problem doesn’t come back. (cost: $4,500)
HVAC system: As a side problem of having rodents, they chewed through different parts of our HVAC system. Which meant we had to get it replaced. This was not cheap. (cost: $1,700)
Electrical: In a totally unrelated issue, we needed something fixed with the electrical in our kitchen. I can’t really remember specifics, but something about the load being too high on a breaker. I don’t know. (cost: $900)
Plumbing: That kitchen faucet we replaced back when we moved in? Well, the seal wasn’t installed quite right. It took two years but then leaking started under the sink and it just wouldn’t stop. Then we had a pipe issue under one of our bathrooms and it needed to be replaced. (cost: $1,000)
Furnace: Our house came with a new furnace when we moved in. It was great. But after two years it suddenly stopped working. Turns out, it was installed on an ever so slight angle that caused corrosion and rendered this beautiful new furnace unusable. Just when the warranty ran out. On the coldest day of the year. (cost: $4,250)
Supplemental tax bill: California buyers take special notice here. When you purchase a house you’ll get a supplemental tax bill. It won’t go to your bank. It won’t get paid from an escrow account. It’ll come directly to you, months after you close, and you’ll be surprised to get it. I’m sure we were told about it at some point in the closing process, but we were already paying so many different taxes (property tax, city transfer tax, etc), that we didn’t pay attention. But when we got our bill, plus penalties for apparently ignoring the initial bill, we paid attention. (cost: $10,000)
Total costs that came up during two years of home ownership: $22,350
Even with all these extra costs, there is still nothing we would’ve done differently. We still would’ve purchased the house. We’d still pay for all of this work to be done. But now we make sure to always have a home maintenance rainy day fund that we can pull from.
SIMPLIFY YOUR MONEY. LIVE YOUR LIFE.
A guide to help you embrace freedom, overcome overwhelm, and live a life that’s better than fine.
Money should be simple.
THE LATEST & GREATEST
If you want to wade into an emotionally charged topic, this is it. How should married couples split finances is a perfect storm of money and relationships. To do it right, one must consider all options and pick the one right for your personality and relationship....
Investing is complicated. At least we make it complicated. A few months ago, I was helping a friend set up her investment account. As I was walking her through her options, I realized that the words coming out of my mouth sounded…obnoxious. “You’ll want to make sure...
Erica and Jordan at the The Worth Project have the goal of sharing their personal finance experience to help readers improve their financial lives. We regularly partner with companies that share that same vision. Some of the links in this post may be from our...