Do You Know the True Cost of Homeownership?
Few things in life are as exciting as buying a new home. Once you’ve signed the contract, you want to put your personal stamp on the house, from the color of paint in the kitchen to the flowers that grow in the backyard.
Unfortunately, few homebuyers realize how these initial improvements might cause financial problems down the road.
According to data collected by HomeAdvisor, homebuyers tend to focus on home improvements that increase curb appeal in the first year of homeownership. Outdoor projects like sprinkler systems, landscaping, fencing, and decks are most common. The data showed that homeowners spend an average of $12,850 on these projects.
Spending all your extra money on such projects can leave you unprepared for common emergencies, however, says Marianne Cusato, special housing advisor to HomeAdvisor. Cusato said the data revealed that more than three quarters of homeowners encountered a home emergency in the first 12 months of homeownership.
The most frequently reported emergencies were blocked toilets or pipes, broken heating or cooling systems, and water leaks. These unexpected projects can cost homeowners anywhere from $200 to $20,000, and can cause financial anxiety if the homeowners entire savings has been spent on cosmetic improvements.
So what can you do to prepare for normal upkeep as well as emergencies? Save money now, says Kyle Brown, Accounts and Payroll Manager at Duffey Realty.
“Savings are so important for a homeowner,” Brown says. “Over the lifetime of a house, things break or wear out. Eventually that carpet from the 70s will have to be updated. Life is so much more peaceful when you have your emergency savings to take care of a termite treatment or to repair the flooring when the washing machine floods the house. You never know when or what is going to happen next with a house, so it’s best to be prepared and have the savings set aside for these life moments.”