When considering purchasing a house or keeping a house in a divorce, which remember is really purchasing it from the other person, there are many obvious monthly recurring expenses to factor into your budget:
- Mortgage Payment (principal and interest)
- Property Taxes
- Insurance
- Homeowners Association Dues
- Utilities
- Water/Sewer/Trash
- Power (Gas, Propane, Electricity, Oil)
- Internet
- Cable/Satellite/Netflix/Hulu/Etc.
- Gardener
- Pool/Hot Tub Maintenance (if applicable)
- Pest Control
- Domestic Help
- Seasonal Help (snow removal, tree maintenance, window cleaning, yard clean-up, etc.)
- Security System
What new homeowners or people taking on the full expense of a home due to a divorce who have not managed the entire household budget learn very quickly is the hidden, less obvious, or lumpy expenses of owning a home. These expenses can cause a lot of stress when they are not planned for or understood in the purchasing and budgeting process.
- Age and condition of home:
- Is there obvious deferred maintenance?
- Was there anything identified in any of the inspection reports (home, pest, geological, etc.)?
- Due to the age of the home do you have concerns about the water or electrical systems requiring updating or failing?
- What is the condition of the roof?
- What is the condition of the exterior paint?
- What is the condition of the solar panels, if applicable?
- Homeowner skillset: Over time things simply happen due to wear and tear: baseboards get dinged, paint chips, lawns need repair, decks rot, pipes get clogged, appliances break.
- What can you do on your own and what would you need to hire someone to do?
- Plumbing
- Electrical
- Painting
- Drywall
- Carpentry
- Flooring (carpeting, tile, hardwoods or engineered flooring)
- Yard maintenance (tree trimming, lawn replacement, seasonal planting)
- Tolerance for styles evolving: Over time things simply become dated-looking. Furniture wears out and trends for paint colors, cabinet colors, window treatments, flooring, and light fixtures change.
- Looking both internally and externally how dated do you feel things are today?
- Are you the type of person that likes to change things up frequently? What specifically do you like to change up?
- How capable are you at doing the work yourself and what are the material costs for the type of changes you want to make?
- Based on the above, estimate the expense of updating over time.
The pride and joy that comes from owning one’s home can be very rewarding. When making what is typically one of the largest purchases in a person’s life it is important to be realistic about the total cost of ownership, which includes time, money, and physical and emotional energy costs.
