Buying a home can be quite stressful. Once the process is over and you have your keys, you’re going to want some rest and relaxation. Before you get to that point, a word to wise: Budget for the hidden costs of home ownership or you could find that the pre-homeowner blues come back to haunt you.
According to a recent report from Bank of The West, young people seem to have fallen into the trappings of home ownership hidden costs. The study of 1,500 homeowners found that while about 40 percent of millennials own homes, 63 percent regret doing so. That’s double the amount of Baby Boomer homeowners who have buyer’s remorse, according to CNBC. The number one reason that young people are having that negative feeling? Failing to account for hidden costs.
The issue at hand is that many young people are so eager to own homes that they don’t realize buying a home isn’t the end of the process. You have to budget for both purchasing the home and owning it. A home’s hidden costs include closing fees, insurance, property taxes, upkeep and repairs. Just accounting for upkeep and repairs can throw off any budget. Experts say that these costs can run you between one and three percent of the home’s sticker price every year. If the house was $300,000, that means you’ll want to have another $3,000 socked away each year to account for unexpected repair costs. The key to avoiding regrets? Budget out the hidden costs. Do plenty of research before buying the house to make sure that you’ll still be in the black after you move in. It’ll make your housewarming party a lot more pleasant.