For many people, investing in a property for the first time is a life-changing moment and it can often be met with a lot of celebration. Once the initial celebration is over however, there are usually some concerns over the overall cost of the investment. You might have been approved for a mortgage, but have you thought about all of the hidden costs?
Here, we are going to let you know about some of the hidden costs that you will encounter when buying a property. Keep reading if you would like to find out more about this.
Home Inspections
Before closing a sale on a property, it is really important that you have at least one home inspection done on it as this can help you to find out about any issues with the property before the final commitment to purchasing it. According to the Department of Housing and Urban Development, you will usually encounter home inspection costs of around $300 to $500 and you might need to have more than one inspection done, so make sure to budget for this.
Closing Costs
Once you are ready to close on the property, you need to make sure that you look out for more expenses that are going to appear. Research has shown that closing costs can add up to around 2% to 5% of the price of your property and many people don’t consider these costs when making an offer, ending up with them racking up a lot of additional expenses they didn’t expect. The costs you’ll encounter usually include things like escrow fees, appraisal and lender fees.
Homeowners Insurance
While you might be aware that you are going to need homeowners insurance for your new property, do you know exactly how much this is going to cost? You need to be covered for many different things including theft and any sort of accidental damage, so make sure that your homeowners insurance includes hazard insurance as if you don’t have this, then you are risking your investment.
While homeowners insurance might cost more than you initially budgeted for, you’ll find that it will be worth the investment in the end should anything unexpected happen.
Change In Energy Bills
One of the things that many people forget to consider when moving to a new property is the change in energy bills. This is something which is likely to affect you if you are moving from a smaller rented property to a larger property owned by yourself, as you’ll need to heat a larger space and will probably use more electricity in general. This is something that you will inevitably need to consider when making your monthly budget for your new property.
Moving Costs
The final hidden expense that you are likely to come across when you invest in a new property is the cost of moving. This is often something which is not considered by homeowners who are more focused on the price of the property than the actual process of moving house, as you’ll need to think about everything from the cost of hiring a moving van to the cost of travel if you are moving far away from your current property. According to Moverdb.com, moving to a property overseas could cost you as much as $10,000!
Budget Accordingly
If you are planning in investing in a new property in the near future, you need to make sure that you are aware of all of these hidden costs. Don’t forget about the overall cost of homeowners insurance, the closing costs and the cost of moving as if you can factor these into your budget, then you should be able to have a stress-free move and enjoy your new property.
