The Hidden Cost of Homeownership

house sitting on pile of coins

Having a home of your own has always been a part of the American dream but do you know the hidden cost of homeownership? Owning your home is indeed a valuable financial asset and paves the way for a more secure future. However, things like property taxes, insurance, HOAs, maintenance and utility costs add up. We will discuss the less-thought-about costs of owning your home. By knowing costs upfront, you are better-prepared to enjoy your home that much more.

Whether you have already closed on your new home or sorting out your finances to sign a suitable deal, it is important to educate yourself. Take account all the possible and often overlooked expenses of owning a home. We can show you some so you are in a better position to manage them effectively.

Property Taxes

As a homeowner, you need to pay property tax. This is a quarterly or monthly fee to the municipality or town in which you reside. You may have expected to pay property tax. But what you might not realize is how expensive these taxes can be. So before you finalize a deal, you need to consult your realtor. Find out about the house taxes of the area in advance.

Your property tax is usually available on MLS listings. Once you have an idea, divide the number by 12, so you can add it to your estimated monthly expenses. Bear in mind that these taxes may increase every year, so assess your finances accordingly. Be prepared if and when this happens. If the tax amount falls well within your budget, only then should you move forward with the purchase. 

Homeowners Insurance

Insuring a house is way more expensive than a rental policy for an apartment. Homeowners’ insurance covers the dwelling. It is not just for the interior which makes it more costly than renters’ insurance. You should be prepared to raise your insurance budget when you buy a house. Also, if you live in an earthquake zone, flood zone, volcano zone, or tsunami zone, you will have to pay extra for disaster risk insurance. 

There are several other factors to consider pertaining to house insurance. At times, people make the mistake of choosing an old house thinking it would help save a lot of money. But the reality is that an older home costs more to insure. This is because the electric system, heating, and plumbing are older and thus more prone to damage. You also need to ensure you have a clear credit record. Insurance companies may periodically check it and increase the rates based on their assessment and your credit score. 

Homeowners Association & Condo Fees

a blue pool and ladder

If you buy a residence within a condominium association or a homeowners’ association, you’ll have to pay a quarterly or monthly fee. It is a charge to use and maintain the shared facilities and public areas such as pool, community clubhouse, playgrounds, garbage collection, landscaping etc. This fee can rise. Your association may need to charge a special assessment for projects like installing a new security system, revamping common areas, or repaving the parking lot. This may cost you several hundreds of dollars per month. Hence, you need to be sure beforehand as to whether you want the services provided by the association. If so, can you afford the charges in the long term?


The moment you purchase a new house, the next step is to decorate and furnish it. Obviously, you would want your place to reflect your style and taste, especially when you have guests over. The budget for setting up the interior or exterior of a house knows no bounds. You’ll find yourself paying attention to things that you may have never have in apartment-living. Things like shutters, walkways, landscaping, patios and more are things you didn’t deal with in an apartment. It is important to not get carried away and buy too many new things. Create a budget for decor and furnishings. Then stick to it, so that the expenses don’t add up faster than you realize. 


We are all well aware of how detrimental heavy repairs are to our budget. So stop ignoring or delaying a small repair until it becomes severe. Avoiding these projects may cause more damage and harm. Its repair will also be heavier on the pocket. One should maintain both the exterior and interior of your home. This includes fixing plumbing leaks, cleaning gutters, resealing the driveway, repairing the appliances, sealing windows and doors, draining the water heater, and repairing or eventually replacing the roof. You should be mentally prepared and financially stable. That way, you can bear all these costs, whether expected or not.

You can consider a reliable home warranty service. It covers repair and replacement costs for your home’s appliances and systems when they are damaged from routine use. This way you are protected from unexpected costs.


While you know that you will need to pay for utilities in your home, the actual cost from these necessities may come as as a shock. If you’ve been living in an apartment previously, the water and heating charges might have been included in your rent and you may not be used to paying big gas and electricity bills. But being a homeowner is a totally different game. It is important that before buying a house, you are prepared to take on these responsibilities. Request the previous homeowner to show you a copy of their utility bills for the summer as well as winter months. This will give you a good indication of how much you should expect to spend on utilities throughout the year. 


There is little that can compare to the joy one feels when you receive the keys of your new home. But this joy can, at times, turn into frustration and panic. Now you are fully aware of the multifaceted and often unexpected hidden cost of homeownership. You understand what to expect and can take action on finding out what these costs will look like against your budget.