Summary of this article
Buying a new house is one of the biggest investments you will make and should be celebrated. However, many people overlook the fact that the cost of homeownership goes well beyond the price you pay when you buy the house. There are several extra expenses you should be prepared to cover.
Homeownership represents one of the largest financial commitments someone will make throughout their life. Many homeowners, however, underestimate the fact that the total expenses of owning a home go beyond the initial purchase cost. There are several extra expenses you should be prepared to cover.
Sam Chopra, President & CEO, eXp Realty India, says, “When people plan for a home purchase, the focus is almost entirely on the agreement value and registration charges. But the real cost of ownership runs deeper. Annual property taxes, insurance premiums, RWA or society fees, utilities, regular maintenance, and occasional repairs can together add 8–10 per cent to your first-year outlay.”
If you’re moving into a larger space or a premium property, the cost of furnishings, landscaping, and even pest control can be substantial. “Add to that the one-time moving expenses, and it’s easy to see why financially-prepared buyers factor all of this in from the start. Planning for these costs allows you to enjoy your home as an asset and lifestyle choice, without the stress of unplanned expenses,” Chopra adds.
Ashish Agarwal, Director, AU Real Estate, has similar views. “The property price is a large part of buying a home, but many buyers tend to ignore the perennial costs that follow shortly after. Therein lies the biggest upfront costs of moving into your new property, such as electricity and water connections, municipal taxes, society maintenance fees, clubhouse fees, etc. On top of that, furnishing your home and managing moving expenses can also run into lakhs, depending on your preferences and requirements,” he says.
Here are some overlooked costs that buyers should consider when buying a home:
Property Tax
Each year homeowners need to fulfill their financial responsibility by paying property tax. The property tax amount depends on where the property is located and its assessed market value. Researching property tax rates within your intended home purchase area and creating a proper budget for these expenses is crucial.
Maintenance and Repairs
House ownership brings the obligation to maintain and repair the property that you own. Home maintenance expenses grow rapidly from scheduled lawn maintenance to unexpected roof repairs. Creating a financial reserve for both routine upkeep and emergency repairs proves to be a smart approach.
Resident Welfare Association (RWA) Fees
Planned communities and sectors require homeowners to pay fees when buying property inside their boundaries. These fees support basic facilities together with security services and maintenance and other common expenses. Before buying a property under RWA control, you need to learn about the association's rules and regulations as well as their fee structure.
Improvement and Renovations
The majority of homeowners choose to invest in home improvement projects along with renovations to boost their property value and enhance their living space.
“Home improvement projects, including kitchen renovations, room additions and fixture upgrades, require financial resources for their completion. You should budget carefully for renovations while selecting projects based on your needs and available funds,” says Adhil Shetty, CEO, Bankbazaar.com.
Home Insurance
Although not required by law, it is sensible to obtain insurance for your home when you have paid a premium for it. Insuring your investment stands as a fundamental requirement. Insurance coverage protects your property and its contents against multiple risks, including fire damage, theft and natural disasters. The cost of premiums depends on the property's value, its location and the chosen coverage options. Multiple insurance quotes should be obtained to select the best affordable policy.
Monthly Utility Bills
New home purchasers frequently fail to account for their monthly utility costs which include electricity and gas and water and sewer expenses. The size of your property together with climate conditions and usage habits determine how much you will pay for utilities. To get precise estimates you should either request seller utility bills or contact local service providers.
Landscaping and Outdoor Upkeep
The cost of maintaining your outdoor space along with garden areas must be considered when your property includes these features. A well-maintained yard needs both time and money and sustained effort. Your budget should include the expenses for landscaping maintenance and gardening services and outdoor maintenance work. Your costs will include lawn equipment and professional services together with fertilisers and irrigation systems.
Home Furnishings
New homeowners need to purchase furniture and appliances as well as decorative items when they move into their new property. A sufficient budget must be set aside for these items because they will become your most substantial expenses. To control expenses effectively, you should select essential items first before purchasing other items over time.
Pest Control
Professional pest control services are necessary to protect your home from pests which include termites, rodents, and insects. The combination of regular inspections with preventive treatments helps stop expensive infestations and property damage. Your budget must include pest control expenses to keep your home free of pests.
Moving Costs
Moving expenses to your new home should not be neglected. The total cost of hiring movers together with packing supplies and transportation will accumulate fast. You should get price quotes from various moving companies before making your budget decisions.
Buying a new house, thus, represents a major financial investment which requires preparation for all additional costs to ensure future financial stability.
“We always advise buyers to take a holistic view of homeownership instead of just thinking about the purchase costs, but also the practical and lifestyle costs involved with moving into your new property. We believe that being prepared financially for the ongoing obligations of home ownership allows the buyers to enjoy being in their new space with peace of mind and security," Agarwal says.
