Hidden costs when buying a new home
Category Advice
There are several extra costs to consider when purchasing a new property and it can often be easy to neglect the fact that the advertised price is not the only price involved when buying a home. This can come as a shock and result in financial pressure down the line, particularly for first time home buyers. Here are 5 hidden costs to be aware of before buying your new home.
1) Admin fees
Ensure that you include all admin fees into your final budget as these costs can add up. There are a number of fees which you need to take into consideration, such as: the deposit, bond registration, transfer duty fees (a tax which applies to properties priced above a certain amount) and attorney fees. These are some of the largest costs associated with buying a new property and it is imperative to take them into consideration when calculating your budget.
2) Moving costs
After purchasing your new home, you’re going to need to move in. Depending on where your previous home is and the quantity of your belongings, you may need to hire a moving company.
The cost of this service can vary from city to city, however this service is usually costly and one should set aside extra funds to cover the moving process in order to avoid disappointment.
3) Homeowner’s insurance
Homeowner’s insurance is a compulsory aspect of applying for a home loan and covers your property in the event of loss or damage. The monthly installments are usually subject to your loan amount and it is important to remember this monthly fee when calculating your monthly bond repayments.
4) Rates and taxes
These are fees which are paid to the authority which services your property and if you are purchasing a freestanding property then you will be charged monthly for rates and taxes. Alternatively, if you are buying a property in a complex or flat then you will be charged levies, which cover the cost of maintaining and running the complex, municipal rates and taxes and building insurance coverage. Taking rates and taxes into consideration is vital when choosing a property as these additional fees can be costly on top of your bond repayments.
5) Upscaling?
If you are moving into a larger property, expect your costs to rise substantially as larger properties come with significant expenses, such as:
Rates and taxes: Because these are subject to your property type, a larger property will have higher rates and taxes than smaller properties.
Maintenance: Usually, a larger property will require more maintenance such as: landscaping/gardening as well as usual wear and tear of pipes, electricals etc.
Electricity: It is difficult to maintain a low electricity bill with a larger property, due to several factors, such as extra lights and plug points.
6) Security and maintenance
Often, once you have moved into a new property, there may be minor factors which you dislike and therefore the property may require a bit of work. Most of the time these costs pertain to security, such as: New alarm systems, stronger fencing and better outdoor lighting. These are costs that one needs to be prepared for after moving into a new property as security is often a priority.
7) Furniture
Additionally, moving into a new home can involve purchasing new furniture. This can be due to a variety of reasons, for instance: smaller rooms which cannot hold your current furniture or even the opposite. Being prepared for extra costs for furniture and electronics is a clever way to avoid these issues after moving into your new property.
By setting aside some extra time for financial planning as well as saving money for unforeseen expenses, you can ensure that you are fully prepared to take on the responsibility of a buying a new property. This can help you avoid the financial stress that is often associated with purchasing a new home.
Author: Dormehl Property Group
