You have been browsing property websites for months now, looking for your ideal house and you cannot wait to finally get your hands on the keys to become a proud homeowner.
Becoming a homeowner is an achievement many desire. Your home is a place of safety and comfort but it does come with a price tag.
So you’ve done your numbers and you know exactly how much your house will cost you; you have budgeted for the deposit, transfer duty and conveyancer’s fees, but have you thought of what it will cost to own your dream home?
What are the costs of home ownership?
• Monthly home loan instalments
This is the most obvious expense to home ownership. This is what you have agreed to pay the bank every month until you have paid off your house in full.
This is the number that most people focus on when they make a decision to buy property; the monthly debit order amount that will go off their accounts, forgetting that there are other costs. And oftentimes it’s these costs that make homeownership feel like a nightmare if you did budget properly for them!
• Rate, taxes and levies.
These fees are largely dependent on the type of property you own. For example, if you live in a complex or flat, which is a sectional title, you will be charged monthly for municipal rates and taxes that must be paid to your municipality and a levy which is payable to the body corporate.
The money paid over to the municipality ensures that it provides sewerage facilities, roads maintenance, street light maintenance and refuse collection. The levy paid to the body corporate is for the costs involved in running the complex, building insurance cover, repairs and maintenance of the complex.
If you own a free standing property, you will be charged monthly for municipal rates and taxes.
• Water and electricity
These expenses depend on your usage. The higher your usage, the higher your bill will be.
• Household contents insurance
Home contents insurance covers you against the loss, theft or damage to the possessions in your home, for example: furniture, appliances and electronics.
Then there is the general maintenance and repairs that you will need to do from time to time to make sure that your property is habitable. From fixing the pool pump to maintaining your garden, you will consistently need to maintain or even make improvements to your home.
No doubt owning a home can bring joy for you and your family but all these costs can add up and negatively impact your budget if they were not well considered prior to purchasing the property.
That is why it is important to find out how much the rates, taxes and levies are for the property you are looking at, you can do find this information easily from your estate agent.