Comments on: Hidden Costs of Owning a Home http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html The journey of a fabulous single mom pursuing financial independence Sat, 06 Sep 2008 01:04:23 +0000 http://wordpress.org/?v=2.6 By: B Smith http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-11971 B Smith Sun, 13 Apr 2008 19:28:42 +0000 http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-11971 Great post. I do have one hidden cost that most people overlook...your time. For most of us, time is our most valued resource. People need to keep in mind how much will be spent with ownership vs. renting. There is a great deal of satisfaction that comes with home ownership, but it comes at a cost. You spend a ton of time on maintenance and improvement. Even if you have someone else do the work it still takes time to supervise and arrange the labor. Your time for paying bills goes up. You need to spend more time on insurance. What about disputing the value that your local taxing authority has you appraised at? I keep an hourly rate for my time in my head. That way I can "monetize" my labor cost. Depending on your profession, that could be anywhere from $5/hr to $250/hr. Great post. I do have one hidden cost that most people overlook…your time. For most of us, time is our most valued resource. People need to keep in mind how much will be spent with ownership vs. renting.

There is a great deal of satisfaction that comes with home ownership, but it comes at a cost. You spend a ton of time on maintenance and improvement. Even if you have someone else do the work it still takes time to supervise and arrange the labor. Your time for paying bills goes up. You need to spend more time on insurance. What about disputing the value that your local taxing authority has you appraised at?

I keep an hourly rate for my time in my head. That way I can “monetize” my labor cost. Depending on your profession, that could be anywhere from $5/hr to $250/hr.

]]> By: Weekend Reading: April 13, 2008 | Moolanomy http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-11943 Weekend Reading: April 13, 2008 | Moolanomy Sun, 13 Apr 2008 13:00:57 +0000 http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-11943 [...] Fabulous Financials lists hidden costs of owning a home. [...] [...] Fabulous Financials lists hidden costs of owning a home. [...]

]]> By: sarah http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-8500 sarah Tue, 12 Feb 2008 02:25:28 +0000 http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-8500 Other costs not related to actually buying, but will cost you while you own the house are heating/cooling costs, water bills and electricity - our electricity bills were HUGE the first year we moved in, as we ran electric heaters (no air con installed, and i don't want to install it now anyway), and with an open plan house it was really expensive - we've since insulated the ceiling, and it has made a significant difference to the temperature. (we're in summer at the moment - so not sure what saving winter will bring) The other cost that went up was our water bills, watering the garden can cost a fair amount of money too! Always check for termites/white ants - here in sydney, if you don't catch them early they'll cost you your house, literally! Other costs not related to actually buying, but will cost you while you own the house are heating/cooling costs, water bills and electricity - our electricity bills were HUGE the first year we moved in, as we ran electric heaters (no air con installed, and i don’t want to install it now anyway), and with an open plan house it was really expensive - we’ve since insulated the ceiling, and it has made a significant difference to the temperature. (we’re in summer at the moment - so not sure what saving winter will bring)
The other cost that went up was our water bills, watering the garden can cost a fair amount of money too!

Always check for termites/white ants - here in sydney, if you don’t catch them early they’ll cost you your house, literally!

]]> By: Fabulous Financials v2.0 » Top 5 Fab Picks of the Week - Remixed http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-8419 Fabulous Financials v2.0 » Top 5 Fab Picks of the Week - Remixed Sat, 09 Feb 2008 22:50:09 +0000 http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-8419 [...] Single Ma’s Fabulous Remix: Hidden Costs of Owning a Home [...] [...] Single Ma’s Fabulous Remix: Hidden Costs of Owning a Home [...]

]]> By: Constance http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-8280 Constance Fri, 08 Feb 2008 14:56:39 +0000 http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-8280 If I could start all over again I would have set aside between $100 and $200 every month for home repairs into a savings account. If I could start all over again I would have set aside between $100 and $200 every month for home repairs into a savings account.

]]> By: Pages tagged "indirect" http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-8261 Pages tagged "indirect" Fri, 08 Feb 2008 13:09:45 +0000 http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-8261 [...] bookmarks tagged indirect Hidden Costs of Owning a Home saved by 2 others     za3az584 bookmarked on 02/08/08 | [...] [...] bookmarks tagged indirect Hidden Costs of Owning a Home saved by 2 others     za3az584 bookmarked on 02/08/08 | [...]

]]> By: Ellen http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-8239 Ellen Fri, 08 Feb 2008 07:04:21 +0000 http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-8239 I second the advice to wait before decorating/buying furniture, if you can. Particularly if you're coming from an apartment and don't have a lot of stuff, I'd make do with your crappy old futon bed and your handmedown sofa for awhile. Live in the house for a few months -- see what you actually do, and which rooms you find yourself drifting toward. That back room you thought you'd use for an office may turn out to get a lot of light and be a great living room instead. Or the living room where you thought you'd need a formal sectional may turn out to just "feel" better with less stuff in it. Are you sure you're always going to put the TV there? Really sure? <strong>Thanks for your input and I agree that one should wait until they get a feel for their new home before spending money on furniture. However, the purpose of this post is not about WHEN or HOW to furnish your home. The point is, you WILL do so eventually, hence, an extra expense incurred that's often overlooked when owning a home. [-SM]</strong> I second the advice to wait before decorating/buying furniture, if you can. Particularly if you’re coming from an apartment and don’t have a lot of stuff, I’d make do with your crappy old futon bed and your handmedown sofa for awhile. Live in the house for a few months — see what you actually do, and which rooms you find yourself drifting toward. That back room you thought you’d use for an office may turn out to get a lot of light and be a great living room instead. Or the living room where you thought you’d need a formal sectional may turn out to just “feel” better with less stuff in it. Are you sure you’re always going to put the TV there? Really sure?

Thanks for your input and I agree that one should wait until they get a feel for their new home before spending money on furniture. However, the purpose of this post is not about WHEN or HOW to furnish your home. The point is, you WILL do so eventually, hence, an extra expense incurred that’s often overlooked when owning a home. [-SM]

]]> By: EvieB http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-8236 EvieB Fri, 08 Feb 2008 04:29:52 +0000 http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-8236 Hmm, the one thing I would add is...especially if you are buying a renovated home is to ask the seller to disclose all of the contractors who performed the renovations, the dates that the renovations were completed and if there are any warranties or guarantees on the work. There is nothing more painful then realizing that the renovation work that "looked" spectacular...is an actual mess. This provides good information because then you can determine if the work was done with permits...and if it was done up to code. A major challenge, especially in the DMV area is that a lot of renovation work was done without permits...and was not done up to code. There are things that even the best-home inspector will miss. So if you have the information, and you have an issue, you can call the contractor who did the work because they will have the best knowledge of the project. Of course, if the contractor won't return your calls... Hmm, the one thing I would add is…especially if you are buying a renovated home is to ask the seller to disclose all of the contractors who performed the renovations, the dates that the renovations were completed and if there are any warranties or guarantees on the work. There is nothing more painful then realizing that the renovation work that “looked” spectacular…is an actual mess.

This provides good information because then you can determine if the work was done with permits…and if it was done up to code. A major challenge, especially in the DMV area is that a lot of renovation work was done without permits…and was not done up to code. There are things that even the best-home inspector will miss. So if you have the information, and you have an issue, you can call the contractor who did the work because they will have the best knowledge of the project. Of course, if the contractor won’t return your calls…

]]> By: sara l http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-8230 sara l Fri, 08 Feb 2008 02:54:39 +0000 http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-8230 I think this is a good list. The one thing I'd say is the decorating doesn't HAVE to be done right away. When my mom and I moved into a town house from an apartment she took her time buying furniture. I think we went 6 months without furniture in the main living room (old stuff was in the basement family room) and I though it was the best thing in the world. There were picnics and sleepovers that I thought were much more fun than furniture. :) We're at the very beginning of the home buying process (getting our lives in order, talking to a broker about pre-qualifying, etc) and the first two rules I've laid out are: 1) No offers until the emergency fund is at three months. 2) We move with the furniture we have and make due until we can afford more. Pam- thanks for the PMI info. That's a really great thing to know as we move forward. I think this is a good list. The one thing I’d say is the decorating doesn’t HAVE to be done right away. When my mom and I moved into a town house from an apartment she took her time buying furniture. I think we went 6 months without furniture in the main living room (old stuff was in the basement family room) and I though it was the best thing in the world. There were picnics and sleepovers that I thought were much more fun than furniture. :)

We’re at the very beginning of the home buying process (getting our lives in order, talking to a broker about pre-qualifying, etc) and the first two rules I’ve laid out are:

1) No offers until the emergency fund is at three months.
2) We move with the furniture we have and make due until we can afford more.

Pam- thanks for the PMI info. That’s a really great thing to know as we move forward.

]]> By: Pam http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-8194 Pam Thu, 07 Feb 2008 22:05:20 +0000 http://fabulousfinancials.com/2008/02/hidden-costs-of-owning-a-home.html#comment-8194 http://www.irs.gov/formspubs/article/0,,id=177977,00.html Mortgage Insurance Premiums Treated as Home Mortgage Interest You may be able to treat mortgage insurance premiums you paid during 2007 as home mortgage interest. The mortgage insurance must be paid in connection with home acquisition debt, the mortgage insurance contract must have been issued after 2006, and you must have paid the premiums before 2008 for coverage in effect during 2007. You can deduct mortgage insurance premiums on Schedule A (Form 1040), line 13. Limit on deduction. If your 2007 adjusted gross income on Form 1040, line 38 is more than $100,000 ($50,000 if your filing status is married filing separately), the amount of your mortgage insurance premiums that are otherwise deductible is reduced and may be eliminated. http://www.irs.gov/formspubs/article/0,,id=177977,00.html

Mortgage Insurance Premiums Treated as Home Mortgage Interest

You may be able to treat mortgage insurance premiums you paid during 2007 as home mortgage interest. The mortgage insurance must be paid in connection with home acquisition debt, the mortgage insurance contract must have been issued after 2006, and you must have paid the premiums before 2008 for coverage in effect during 2007. You can deduct mortgage insurance premiums on Schedule A (Form 1040), line 13.

Limit on deduction. If your 2007 adjusted gross income on Form 1040, line 38 is more than $100,000 ($50,000 if your filing status is married filing separately), the amount of your mortgage insurance premiums that are otherwise deductible is reduced and may be eliminated.

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