REGRET #3: MISCALCULATING THE COSTS OF HOMEOWNERSHIP
Though real estate is a great long-term investment, it can be pricey in the short-term, often surprising homeowners who aren't prepared for it. According to some estimates, for example, annual maintenance could cost as much as 1% or more of your home's purchase price.5 Some buyers also forget to factor in additional ownership expenses, such as property taxes, insurance, and repairs.
Failing to think through the costs of homeownership is one of the most common sources of homebuyer regret. According to Anytime Estimate, for example, nearly half of the homebuyers who regret their purchase said they underestimated how much they would spend to live in it.2
However, some homes cost more to live in and maintain than others. So even if you're certain
that you can afford the average cost of homeownership, that doesn't necessarily mean that
every home in your price range will fit neatly into your budget. For example, very old homes with unique maintenance requirements could be extra pricey to keep up. Similarly, homes with high
HOA or condo fees could also eat into your monthly budget.
Lesson Learned: A home should help you build your wealth, not drain it. So it's important to factor in all the potential costs of living in a home—not just obvious ones like your mortgage payment and taxes. To ensure you don't get overextended, add up your estimated maintenance and repair costs, as well as any miscellaneous expenses that are unique to a particular home.
We can help you with these estimates—and, if needed, present you with some less-costly alternatives.