When you buy a home, you are taking on the responsibility of maintenance costs. They're inevitable for all homeowners, but they can be significant depending on the specific property. Before buying a home, maintenance costs and unexpected repairs must be considered. It's recommended to hold back 1% of the home's value annually for maintenance and appliance replacement, but that does not cover unexpected repairs.
Property taxes can be a significant expense. The actual amount can fluctuate, and this must be considered before buying a home. There are a variety of factors to determine the amount of property taxes, such as the area, state, and local budget cuts, renovations, as well as many other things.
Many mortgage loan lenders require homeowners to have house insurance. Unlike rental insurance, which covers possessions, homeowners' insurance covers both possessions and the cost of the property. Although it's an extra expense, it's beneficial to have even if it is not required. As for the cost of home insurance, it depends on the specifics, but you can get an estimate by dividing the home's value by 1000, and then multiplying that by 3.5 (HomeGuides).
A benefit that comes when you buy a home is the tax deductibility of mortgage interest. This number is hard to estimate from a general standpoint because it greatly depends on your specific financial situation. However, owning a home can provide you more savings than if you were to rent, simply because of the tax deductible.
The appreciation of a home's value is generally high. However, this can change rather quickly depending on the housing market, as well as many other factors. ABC News estimates home prices will appreciate around 3%, according to the historical average. The thing that many people forget is that as a home's value increases, the cost of maintenance and insurance does as well, due to inflation.
In terms of liquid money, home ownership won't bring you much of that. However, buying a home does have the potential to bring you a high return on investment. More importantly, your monthly bills go towards something you own. When renting, you're essentially paying someone else's mortgage without receiving any ownership. Many additional factors also need to be considered when determining if buying a home is worth it, such as whether you want to buy a home as an investment property, plan on flipping the house, or want to retire in it. The first step is to answer the inevitable question, "Can I afford a home?" and these general guidelines can help you determine that.
Owning a home requires a lot of work. Fixing up the house can also get expensive. Tackling a few DIY projects is a great way save a lot of money and add value to your property.
Add insulation to your attic
Although it might not be the most impressive project, adding insulation to your attic can save you an enormous amount of money for years to come. Laying insulation is a very easy DIY project. The materials are inexpensive and can be purchased at most home improvement stores.
Turn up the lights
Although it's easy for homeowners to grow accustomed to sitting in dimly lit areas, adding lighting to brighten up a space is a no-brainer. You can add some lamps, or for a relatively simple project that takes only a few minutes, install a dimmer switch.
Painting is passé and wallpaper is in vogue. Wallpaper can be a great investment for a living room or bedroom. There are more designs than ever available on the Internet. That said, although painting isn't currently in style, it also never gets old. A simple paint job over a greying white wall really brightens up a space.
Add some flair to your door knobs
Although a doorknob doesn't sound like the most interesting element of a room, it can easily become a beloved art piece. Decoupage is a colorful old-world look, but it's also expensive.
Turn a closet into a room
While most people feel they don't have enough space, there are some folks who have unused closets. It's easy to take a closet door off its hinges and convert the space into a small office. Paint the walls a bright color, add shelves, great lighting and a small desk. Voila, you've got the home office of your dreams!
Paint your front door
Make your home as inviting as possible by painting your front door a color to match your personality. If your home is light grey or white, consider a bright red or blue door to make it really "pop." For darker-colored homes, try canary yellow.