When we talk about buying a home, one of the first things that comes up is the purchase price. How much can you afford? What is your budget? What will your mortgage payment look like?
But here’s a question worth asking: What happens after you get the keys?
Because the truth is, the cost of owning a home goes well beyond your down payment and monthly mortgage payment. And understanding those additional expenses before you buy can make a big difference in how comfortable and confident you feel as a homeowner.
Let’s talk about what to expect!
Beyond the Purchase Price
Owning a home comes with plenty of wonderful benefits. You can build equity, create a space that reflects your personality, and put down roots in a community you love. But homeownership also comes with ongoing expenses that are easy to overlook when you’re focused on finding the perfect property.
Depending on the home you purchase, your budget may need to account for:
Property taxes: An ongoing expense that helps fund municipal services.
Home insurance: Coverage to help protect your property and belongings.
Utilities: Electricity, natural gas, water and other services.
Maintenance and repairs: From fixing a leaky faucet to replacing a broken appliance.
Major replacements: Roofs, furnaces, hot water tanks, windows and other big-ticket items.
Landscaping and seasonal upkeep: Lawn care, snow removal, tree maintenance and general outdoor work.
Some of these expenses are predictable, while others seem to arrive at the least convenient time. (Why does the furnace always seem to have its own schedule?)
The key is to plan for more than just your monthly mortgage payment. Having a financial cushion for routine maintenance and unexpected repairs can help make homeownership less stressful.
Homeownership Looks Different Depending on the Property
One thing I think is important for buyers to understand is that the type of property you choose can have a big impact on your ongoing costs.
A detached home, townhouse and condominium all offer different benefits, responsibilities and financial considerations. The right choice isn't necessarily the property with the lowest purchase price. It's the one that fits your lifestyle, budget and comfort level with maintenance.
Buying a Detached Home
With a detached home, you generally have more control over your property and how you maintain it. Want to change your landscaping, build a deck or plant a garden? You typically have more freedom, subject to applicable regulations and restrictions.
However, that freedom comes with responsibility.
You are generally responsible for maintaining the roof, exterior, furnace, plumbing, appliances, yard and other components of your property. When something needs repairing or replacing, you need to have a plan to cover the cost.
A new-to-you home might look beautiful on possession day, but it's worth considering the age and condition of its major components. A roof that is nearing the end of its life or an older furnace could become a significant expense down the road.
Buying a Townhouse
Townhouses can offer a nice balance between detached homeownership and condominium living, but the details matter.
Some townhouse developments have condominium fees that cover certain exterior maintenance, landscaping, snow removal and common areas. Others may leave more maintenance responsibilities to individual owners.
Don't assume every townhouse works the same way! Before buying, make sure you understand exactly what you own, what you are responsible for maintaining, and what any monthly fees cover.
Buying a Condominium
This is where condo fees often enter the conversation.
At first glance, a monthly condo fee can feel like just another bill to add to the budget. But those fees may cover services and expenses that you would otherwise pay for separately.
Depending on the condominium, fees can contribute toward common-area maintenance, landscaping, snow removal, building insurance, management, utilities and the reserve fund.
So, what is a reserve fund?
Think of it as a savings fund for major future repairs and replacements involving the condominium's common property. Depending on the building, these expenses could include the roof, exterior, windows, mechanical systems and other significant components.
Rather than relying entirely on owners to pay for major common-property expenses when they arise, the condominium corporation collects contributions over time to help prepare for those future costs.
However, not all condominium corporations are in the same financial position. Condo fees, what they include, the condition of the building and the health of the reserve fund can vary significantly.
That's why reviewing the condominium documents is such an important part of buying a condo. Understanding the reserve fund study, financial statements, meeting minutes, insurance information and any anticipated major projects can help you make a more informed decision.
And remember, condo fees don't eliminate every expense. You may still need to budget for your mortgage, property taxes, insurance for your unit and belongings, utilities not included in your fees, and repairs or maintenance that fall within your responsibility.
Let's Talk About the Cost of Owning a Home
When helping buyers explore their options, I believe it's important to look beyond the listing price and consider the bigger financial picture.
A condo might have a lower purchase price but higher monthly fees. A detached home might offer more space and freedom but require a larger maintenance budget. A townhouse might provide a middle ground, depending on its structure and fee arrangements.
There is no one-size-fits-all answer. It comes down to your priorities, your budget and the kind of homeownership experience you want.
Before you buy, take the time to estimate your ongoing expenses, ask questions about the property's condition, understand what maintenance you will be responsible for, and set aside money for future repairs.
Because buying a home isn't just about being able to afford the keys. It's about feeling comfortable with the responsibilities that come after you receive them.
At Russell Realty with CIR Realty, Carl and I want to help you understand your options, ask the right questions and feel confident about the decisions you're making.
Let's talk about what homeownership could look like for you!
We'd love to hear from you: What homeownership expense surprised you the most after buying your first home? Or, if you own a condo, what did you learn about condo fees that you didn't understand when you first started looking?
Your experience might help someone else prepare for their own homeownership journey!