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
First and maybe foremost, one of the most important rooms in a home, the utility room houses major components to your home that help keep it functional and operable, it's for many the heart of a home, although it's often the least visited, and not the easiest on the eyes.
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.
Making the move from a smaller apartment or from your parents family home to a house? You'll likely need furniture and furnishings, and even if you hit up Kijiji and the Facebook Marketplace to score some deals on second hand (and sometimes new) stuff, you will still need to save or have money on hand to fill your new place up and make it functional. Think about the small things you might use, but not own yourself, from blenders, to blankets, towels, to carpets, and a TV.
Closing & Startup Costs
We've covered this one in full, you can read our closing costs blog for more detailed and comprehensive information, but essentially you should be prepared to have money saved for the following items.
Please note these prices are loose average prices and costs can increase or decrease based on your specific needs, upgrades, purchase price, etc.
Legal Fees ($1,250)
Property Taxes (Property specific pricing)
Title Insurance ($500)
Cleaning if not completed by seller ($250)
You'll also need to setup a home Insurance policy which should range between ($800 to $2,500+)
Mortgage or life insurance - Often purchased to protect significant others, costs can vary significantly, we recommend discussing this option with your mortgage or banking professional as well as a life insurance agent to gauge which options (mortgage insurance, life insurance) is best suited for you and your current situation.
HOA Fees - Did you know communities including Auburn Bay, Cranston, Discovery Ridge, Lake Bonavista, Mahogany, and Seton among many others have HOA fees. These fees can range but you could be charged over $250+ for some communities yearly for HOA fees. The home owners association fees can include landscape maintenance in the community, maintenance of facilities, parks, as well as lake maintenance and more.
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.
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!
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.
Stay tuned for our future blog that covers the hidden BENEFITS of home ownership!Posted by Cody Tritter on