The Hidden Costs of Homeownership: What First-Time Buyers Need to Know
Real Estate Insider
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Buying a home isn't just about the down payment and EMI. Discover the hidden costs like maintenance, taxes, and insurance that can affect your budget.
The sticker price of a home is rarely the final price you pay. Many first-time homebuyers focus solely on the down payment and the monthly EMI, only to be blindsided by a host of ongoing expenses that come with owning a property. Before you sign that deed, make sure you've accounted for these "hidden" costs.
1. Maintenance and Repairs
When you rent, a broken pipe is the landlord's problem. When you own, it's yours.
- Routine Maintenance: Painting, pest control, cleaning, and servicing appliances.
- Major Repairs: Replacing a roof, fixing structural issues, or upgrading electrical systems.
- Rule of Thumb: Budget 1% of your home's value annually for maintenance. For a ₹50 Lakh home, that’s ₹50,000 per year.
2. Property Taxes
Property taxes are a recurring annual expense that can increase over time as your property value goes up or local tax rates change. These are often mandatory and failure to pay can lead to legal trouble.
3. Homeowners Association (HOA) / Society Fees
If you buy an apartment or a home in a gated community, you will likely have to pay monthly maintenance charges to the society. These cover:
- Security services
- Upkeep of common areas (gardens, gyms, pools)
- Water and electricity for common spaces
These fees can range from ₹2,000 to ₹10,000+ per month depending on the amenities.
4. Home Insurance
While not always mandatory, protecting your asset against fire, theft, and natural disasters is crucial. Premiums depend on the coverage value and location but add another layer to your annual costs.
5. Utilities
Utility bills often jump when moving from a smaller rental apartment to a larger owned home. You might be paying for more electricity, water, and gas than you're used to.
6. Furnishing and Interiors
That model apartment looked great, but your new home comes with bare walls. Wardrobes, kitchens, light fittings, and furniture can cost anywhere from 10% to 20% of the property value.
The Bottom Line
Homeownership is a rewarding experience, but it requires a realistic budget. Don't max out your affordability on the EMI alone. Leave breathing room for these hidden costs to ensure your dream home doesn't become a financial burden.
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