The Costs Of Home Ownership

When you move from renting or living at home with your family, to owning, things change. Home ownership requires more responsibility, and there are costs that can sometimes be overlooked by future home buyers.

At the Real Estate Partners team with RE/MAX FIRST we believe that clarity and transparency are key components to a successful and rewarding home purchase for our clients, this blog covers some of the most important hidden costs of home ownership in Calgary whether you're looking to buy a condominium, townhome, or detached single family home. 

As a renter, you're typically not responsible for much (if any) maintenance in a home, your lease may reflect basic yard work, switching out lights, etc but when it comes to owning, there's a number of responsibilities and costs that you may incur and may not be aware of!

Utility Room Expenses

The utility room, often considered the core of a home, is crucial yet frequently overlooked. It shelters essential systems that ensure your home remains functional and comfortable. Despite being less frequented and visually appealing, its significance in maintaining the household's heartbeat cannot be understated.

Furnace Costs

 Furnaces that need replacement can be quite costly, expect to pay at least $3,000 for a replacement (low) but typically closer to the $5k to $7k range, fortunately this systems life span can last upwards of 15 - 30 years, especially with proper maintenance. But you should budget $25 to $100 per year to replace your furnace filters, and older furnaces can require repairs (Motor or other component replacements) that could land you with bills from $500 to $1,000+.  While this does sound daunting, we can share from personal experience that these costly repairs aren't as common, but new home owners may not be aware of them and it's important to budget and be ready for unexpected costs. 

Hot Water Tank Replacement Costs 

Traditional hot water tanks do have a life span, typically expect it to last 8 to 12 years but life span can go beyond that depending on use. This system delivers hot water to the plumbing fixtures in your home (shower, faucets, etc)  Depending on the size, type of tank (Brand) and location of your tank, expect to pay between $1200 to $1,800 for a complete hot water tank replacement. Risk of not replacing: If you decide not to replace your hot water tank, it could have a catastrophic failure, this could result in major water damage, and while there are signs that your water heater is dying we always recommend you consult a professional to ensure the safety of this significant piece of equipment in your home. 

Furnishing Your Home

Transitioning from a cozy apartment or the familial nest into your own spacious house is an exciting journey that comes with its own set of considerations—especially when it comes to furnishing your new abode. While platforms like Kijiji and Facebook Marketplace offer a treasure trove of both second-hand gems and brand-new items, equipping your home with all the essentials can be a significant financial undertaking. It's not just about the big-ticket items like sofas and dining tables; it's the myriad of small details, from kitchen gadgets and cookware to the comfort of plush towels and soft linens, that transform a house into a home. The quest for a fully functional living space could have you budgeting for everything from a reliable vacuum cleaner to the luxury of a state-of-the-art television, not to mention the decorative touches that infuse your space with personality and warmth.

Furnishing your home is more than a financial transaction; it's a journey that takes time, research, and patience. Beyond the initial excitement lies the reality of backorders, delivery schedules, and the occasional need for returns or exchanges. The process requires a blend of practicality and passion, as you balance your desires with the constraints of your budget.

Delivery Fees

In addition to the base costs of furniture, delivery fees represent an unavoidable expense that can quickly add up. These fees vary significantly based on the size of the items, distance, and whether you require installation services. It's wise to allocate an additional 5-10% of your total furniture budget to cover these logistics, ensuring your beautiful pieces arrive safely and are ready to use. Warranties and Additional Costs

Warranties and Additional Costs

Another critical consideration is the option for warranties. While it might seem like an additional expense upfront, warranties can save you considerable amounts of money in the long run. They provide peace of mind, protecting your investment against defects, accidental damage, or wear and tear that exceeds normal expectations. When considering warranties, evaluate the cost versus the potential savings on future repairs or replacements, especially for high-ticket items.

Lawn maintenance not only requires the tools (if you're taking the yard on yourself) but if you're not one to push a lawn mower, maintenance can run you $50-$100+ per month, and the same goes for those who aren't fans of the cold weather and shoveling. 

Depending on your property, you might need to prepare for the cost of a new fence or to make repairs on the existing one, and you may need to purchase patio furniture, chairs, firewood,  and possibly could run into costs for pest control. 

Time

When you rent and something goes wrong, typically you call your landlord and they deal with it, when you become a home owner, all of the things we mention not only require your attention and money, but they'll eat up a lot of your time as well. Whether it's something simple like a drain pipe under the sink that's leaking and needs to be replaced, to more major renovations, you'll have to spend more of your time either taking on the renovations and repairs yourself or vetting, hiring, and booking someone to do the work! 

As a brand new home owner, a leaking faucet may require you to make a trip to the nearest home renovation store, in there you could find yourself needing a few tools and supplies, that trip plus the time to learn how to complete your repair (straight forward or not) can all add up. When it comes to fixes, even if it's straight forward, all these little fixes and tasks can eat up some of your free time, if lifestyle and not being tied to your home are very important, you should consult with your REALTOR® to discuss purchases that may mitigate this (newer homes for example) where they're less likely to need time invested into them. 

While this shouldn't scare most people away from wanting to purchase and own a home, it should be something you ready for. Having the right information and knowledge means you're prepared and not facing constant battles or challenges of home ownership that you may not have otherwise been prepared for! 

Allocating Funds for Home Maintenance

When it comes to preparing for home maintenance expenses, a common rule of thumb is to set aside a yearly fund of 1% to 2% of your home's purchase price. However, this is a generalized estimate and the actual amount can vary widely. The age of your home, its condition, and the size are significant factors that can influence maintenance costs. For example, older homes might require more upkeep, while larger homes could have higher costs due to the greater area that needs maintenance. Additionally, it's wise to consider the local climate and the unique features of your home, as these can also impact the frequency and type of repairs needed. Establishing a dedicated savings strategy for home repairs can help you manage these expenses proactively, ensuring that you're financially prepared for routine maintenance and unexpected issues alike.

In Conclusion

Home ownership has many perks, but there can be unexpected and extra costs that you should watch out and be prepared for. Many costs are financial, and plenty can not be avoided for most  (insurance, HOA fees, property taxes) after reading this blog you should have a good idea of some of the most common hidden costs of home ownership and be more prepared for the rewarding journey of home ownership.