Are you considering becoming a homeowner instead of paying rent to a landlord every month? Before you make the leap, you have to figure out if you can afford to be a homeowner. Besides paying a mortgage, you will have some other expenses as a homeowner that you’re not used to if you’ve only been a renter. When you calculate whether you’re ready to buy a home, don’t forget to include these homeowner expenses:
Unlike renters, homeowners are responsible for paying property tax on any property they own. In 2015, the average cost of property tax was $2,132, but the price that you will have to pay will vary depending on where you live, the value of your home and the size of your home. The property tax for each home will change slightly every year, but to get an idea of how much you will have to pay, ask your agent to look up how much the taxes were over the last few years. You won’t pay this exact amount, but it won’t fluctuate too much.
As a renter, you are not responsible for paying fees to the homeowners’ association, but as a homeowner, you have to take on this additional expense if you live in a HOA community. The fees you owe will vary greatly depending on what type of community you live in, but they typically fall somewhere between $200-400 a month. If the HOA fees are quarterly, expect a larger payment every 3 months. Talk to your agent about whether or not the community you’re looking at has a HOA, and if so, how much it will set you back every month.
If your roof starts to leak or refrigerator breaks in a rental, all you have to do is call the landlord to have it replaced or repaired. However, if you are a homeowner, the only person you have to call is a repairman to come out and fix it—on your dime! It’s hard to estimate how much you should set aside for maintenance every month, after all, it seems that things tend to break when you least expect it. But, it’s important that you put some money aside to account for unexpected repairs so you don’t have to scramble for the cash when the time comes.
Renters typically pay electric and cable, but are not responsible for water or other utilities that homeowners have to pay. Plus, you will probably live in a larger space as a homeowner than you did as a renter, meaning your electric bill will increase slightly. Before you buy a home, talk to the current owner to determine how much they pay every month to get an idea of whether or not you can afford it.
Now that you know if you’re financially ready to buy, it’s time to find the home of your dreams. Contact our team of real estate experts at Coast 2 Coast Realty who have years of experience helping buyers and renters find their dream homes in the Tampa area.