Investing in a property for the first time is a really exciting occasion. As well as all of the excitement of getting your own house or apartment, though, you also need to think about the practicalities of buying somewhere for yourself. For instance, what about the expenses of owning a property? Read on to find out more.
If you are buying a property, unless you are able to buy it outright, you’ll more than likely have to pay a mortgage. For most people, this is their biggest monthly expenditure so you need to make sure you’ve taken it into consideration in your budget.
Your level of property tax will depend on where you live and the value of the house you are living in. Generally speaking, this means that if you and your neighbor live in houses of roughly the same size, you should be paying the same level of property tax. These taxes are one of the main ways state and local programs are funded, so it’s an important expense to remember.
As well as paying your monthly mortgage, you also need to remember to budget for your energy use. This includes things such as your electricity, gas and water. It’s worth shopping around for the best deals on your energy as different providers offer different rates. You might find that it’s cheaper to bundle your gas and electricity together as part of a package, for instance, while other providers might offer you a good value fixed rate.
Anyone who buys a property needs to have home insurance. The only exception to this is if you’re renting, in which case your landlord should take care of this so you’ll only need to get contents insurance. If you’re investing in a property, though, you will need to get contents insurance for your possessions and buildings insurance for the property itself. This will cover you for things such as theft, fire and other damage. Make sure you read your insurance policy to check it contains everything you need, and use comparison sites to check out the different deals on offer.
TV and internet
These are strictly necessary expenses so you could do without them if you wanted, but most people these days do have a TV package and, more often than not, the internet. One option is to buy these separately, but some providers will bundle together TV, internet and phone, which can help you save money.
Fees and costs
Don’t forget, either, that when you’re investing in a property there is likely to be some initial expenses you need to take care of. This could be realtor fees or the cost of hiring a lawyer to complete the property transaction. One-off costs such as home renovations and improvements may also need to be factored in.
Finally, don’t forget your running costs. This means things like food expenses and the cost of commuting. It can be a good idea to write a list of all your expenditure when investing in a property for the first time, as this will give you a better idea of what’s necessary and what you might be able to do without in order to keep your costs down.
Guest Post by James