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Home Ownership Costs
Have you been considering purchasing a home? That's the American Dream isn't it? To have a place to call HOME, raise the kids, gather friends and family, make memories, and not to mention the tax benefits. You are building your portfolio, your net worth, investing, and most of all achieving dreams. As you consider purchasing a home, many people are inclined to ask "What will my payment be?" That's a great question as you want to stay within your means, have a budget, etc...but don't forget about the 2nd largest expenses for a homeowner consist of taxes and insurance. Many people escrow those but don't forget about expense of maintenance and repairs.
The repairs and routine maintenance are items to be considered especially when purchasing a RESALE home. A good Realtor will help you negotiate a Residential Service Contract for the 1st year of your investment via the purchase contract and many things are covered based on the company and plan you choose. Be educated when you make this decision. There will be occasional expenses for repairing toilets, faucets, windows and other things. But consider the significantly larger expenses that arise like replacing a water heater or HVAC unit and don’t overlook the periodic maintenance like painting or floor coverings. But it is a wise idea to consider your options after your Residential Service Contract ends, what then?
Based on recommendations from Financial experts, they suggest that homeowners save one to four percent of the home’s value per year for repairs and maintenance. Two to eight thousand dollars a year may sound like more than you’ll need but the cost of an air conditioning unit can easily be $6,000. Then some homes have more than one unit and hopefully won't have to be replaced in the same year!
So, what are your options?
1) Save 1% to 4% of your home's value each year
2) Extend or purchase a Residential Service Contract to offset some of those costs
3) Put the repairs on your credit cards
4) Take out a home improvement loan
Appreciation is a distinct benefit of home ownership and deferred maintenance can limit the value as well as lengthen the market time when it sells. Think about your options! If you need a list of Residential Service companies, feel free to call, text or email me! Thanks!