Talk Me Out of It (or, what do you spend on your house?)

I’m starting to get cold feet about the whole homeownership idea. (No new developments on the job front, so I’m still not sure whether or not this is a real question, but it’s sure on my mind a fair amount. I’m going to keep calling it a semi-hypothetical.)

The thing is, both everything I read online and my experience of watching my parents have a house indicates to me that it’s way more expensive than it sounds. Just because the mortgage payment says $450 a month doesn’t mean those are your actual costs…. it all makes keeping my $400-with-utilities-included rented room indefinitely sound pretty good.

But I’m having a hard time putting actual figures to this. Based on what a friend of mine spends, I’m guessing $750-800 a month for mortgage, taxes, insurance, and utilities. That’s perfectly doable for me, especially since if I did take a permanent job here it would come with a substantial salary bump. (I also would prefer to have a housemate, so that would help financially, but I’d rather not assume/depend I’d have someone every single month; I want to be able to afford it on my own and have rent be a nice extra.)

And I know closing costs are expensive, but let’s assume those are covered.

What I’m really having trouble imagining are the other “carrying costs” of a house. Those of you who are homeowners, how much do you set aside every month for things like the new roof or the boiler blowing up or the plumber having to remove your kid’s Barbie from an inconvenient pipe? In other words, what goes in your house maintenance fund? What have you had to spend on as a homeowner that you never imagined?

I think I might also have to budget for snow removal, especially if I get a house without a garage….

Y’know, maybe I’ll just stick with the rented room and get a new car, or a dog. Or a new car and a dog.

22 thoughts on “Talk Me Out of It (or, what do you spend on your house?)

  1. Just spent $45k on renovations for the new place. I would say around $18k of that was on essential needs (roof, foundation, get rid of the fire hazard electrical). Even having done that, I’m still expecting to want to put aside around $200-400 a month for ongoing maintenance. And this is only for a roughly 1100 sq. ft. condo. Granted, I’m in a HCOL area so YMMV. I would caution against buying a place until you have significantly more than a down payment and closing costs in hand. You just never know what’ll happen.

    1. thesingledollar says:

      Good advice, thanks!

  2. I would assume you know about this site but in case you don’t….Go check out‘s website for the last 2 articles. He has seriously made us rethink everything we have ever thought about homeownership. I lived in my first house for 12 years and in no way did I come out ahead financially. I’m not saying homeownership is bad or not right for someone. There are so many variables in each individual’s situation. But it is very thought provoking.

    1. thesingledollar says:

      Cool, thanks, that’s good to know! I’ll check out the site (I’ve heard of it, but don’t read it regularly.) There are other factors besides financial gain involved on my end, but that’s certainly a big one….

  3. Cindy says:

    I think a lot depends on the condition of the house you buy, and the size. The last house I owned was small (683 square feet), but needed a ton of work. In the 7 years I lived there, everything from the roof and siding, to the kitchen and bathroom, were replaced or upgraded. I knew that would be the case when I bought it though. I didn’t expect things like the city requiring me to hook up to the new sewer system, which costs thousands.

    Being willing to do a lot of things yourself will save you a ton of money. I had general rules I followed for what I would/wouldn’t try: Anything from the walls and floors out was fair game, but I called a professional for things like plumbing and electrical that went below the surface (i.e. I’d change out an outlet, light fixture, or garbage disposal, but not try to fix pipes in the crawl space, or mess with the breaker box). And I won’t touch anything gas, although my Dad often helped with things like replacing the hot water heater, and hooking up a new stove (both gas). Everyone’s comfort level and experience are different, so go with what you’re comfortable with.

    Despite all the upgrades, my home value didn’t increase much by the time I sold, and Realtor fees and closing costs pretty much wiped out the gains. When I ran some rough numbers, I figured over 7 years I spent about $750/month on my house, not including utilities. The mortgage, along with taxes and insurance, was $400/month. So I spent about $350/month on upgrades, remodeling and repairs over the 7 years I lived there. Honestly, I’ve paid that much for a one bedroom apartment in some areas, so I don’t think that amount was terrible to have a house of my own.

    Again, that was on a house that was a major fixer-upper. And I definitely could have done less. I love home improvement, and I’d definitely do it again. But I learned a few things that I’ll take into consideration next time: If you’re going to buy a fixer-upper, make sure it’s in an area where the other houses are nice, or there’s a movement to improve the other houses. (There were a lot of distressed properties on my street when I bought, and there wasn’t a lot of improvement on that end when I sold.) Make sure you put at least 20% down, so you have equity right off the bat. (I put 0% down, and was stuck not having enough equity to sell for several years after the market crashed) And, even if you plan to live there a long time, take the resale appeal into consideration on the house you buy. (My one bedroom has was adorable, and perfect for me. But there’s a very tiny market for one bedroom houses, especially in the area I lived).

    Where I live (Indy), it’s pretty common for the seller to pay the buyer’s closing costs. But the buyer will still pay for things like the inspection (which is optional, but I wouldn’t skip it), appraisal, and a few other minor expenses. I’d plan for around $1,000 in expenses (maybe more, maybe less), plus the down payment.

    1. thesingledollar says:

      super helpful — especially since I live in IN too!

  4. I’ve never been a homeowner so I’m not sure, but I used to think that owning a home was some kind of right of passage into adulthood, but now I don’t think so at all. They both have their pros and cons, but there is no such think that dictates you must buy a home if you you are an American and want to be living the dream…if that makes you feel any better? 🙂

    1. thesingledollar says:

      Oh, I definitely don’t think that! I’ve missed all the other adulthood markers anyway, so why hit this one 🙂 Ugh, it seems so scary to make the call one way or the other though….

  5. Hannah says:

    So, my estimates are that I spend $6K per year on non-value added home spending.

    This would include repairs to major appliances (or replacement), repairs to roof and siding (prorated over 20 years each), lawn care, modest upgrades over time (new kitchen stuff every 20 years or so, paint, new floors every 20 years or so, etc.), modest bathroom repairs and upgrades every 15 years (these date so fast), AC, heating, funace etc, plus taxes and insurance ($1200/yr).

    This guy has done the best break down of home ownership that I’ve seen.

    My $.02 is that if you can get a place where your mortgage is $500/mo less than renting something of equivalent value, go for the house. That’s the barometer we use, and we’re killing it here in Raleigh where houses cost $65K and rent is $1000/mo.

    1. thesingledollar says:

      That’s super helpful, thanks! I’ll check out the other site too.

      I’ll definitely look at rental houses too if I do stay; just not sure I can find one that’s not really really run down….

  6. ARBM says:

    The expenses of owning a house really do add up quite quickly… We’ve only been in our house for about a year and a half, and we’ve spent probably close to $20k on improvements and maintenance… But we’ve done some big ticket items that should last for as long as we live here…

    1. thesingledollar says:

      Yeah, I feel like the first year is always crazy because there’s so much to do in terms of the kitchen and furniture and whatever. $20K is a lot though! Whew!

  7. DebtFreeJD says:

    A dog!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    PS The carrying costs of a house will vary a lot depending on the condition of the house. And how handy you are.

    1. thesingledollar says:

      I love my housemate’s! I’ve never especially liked dogs, but my BFF is allergic to cats and there is something very appealing about being forced out of the house several times a day to walk them 🙂

  8. Jason says:

    I think some of the comments here are great, but let me come out and advocate for buying a house. I actually have written a couple of posts on this on my own blog about home ownership, mortgages, etc. And I have read GCC’s and MMM’s posts on these subjects. And they make some great points. Despite that fact, I generally think that home ownership is better than renting. If you do buy a home the rule of thumb I have always heard is to put aside 1-3% of the home’s value every year for repairs (e.g. roof, appliances, etc). Second, there is no doubt that buying a house isn’t necessarily cheaper than renting. I mean you have to do the repairs, you have to do the lawn work, etc. I mean it takes time and some money. But there are intangible things. For example, this is your house. You can put a nail in here anywhere you want and it doesn’t make a difference. You don’t have to check with the landlord to see if you can do a paint color or whatever. That is liberating. Third, I think eventually the sunken costs of a house actually bear fruit over the years. it seems to me that a lot of people spend the first couple of years working on their house (e.g. furniture, etc) and then after that just pay the basic mortgage, utilities, etc and their basic mortgage stays the same while their income goes up. And more than likely your house will grow in value. Now will it grow faster than the stock market, probably not. But a house shouldn’t be a piggy bank. I mean you can’t go to the house ATM and get a $100.

    If you are going to be in the area you are at now for five years or more I think home ownership makes sense. It offers you a sense of belonging, roots, and other things that you don’t get from the math. However, if you want to move to another job or just have a fear of that kind of commitment than by all means rent. But don’t let cold feet get the best of you. There are good cases on both sides, but generally i think home ownership is the way to go. In some respects, you control your own destiny with a home. A landlord can kick you out, sell the house, raise your rent, etc all without anything you can do about it.

    So if you have a down payment, some money for closing costs (which you can roll into a mortgage), and are going to be there for a few years than buying a home can be a great idea.

    1. thesingledollar says:

      That’s really helpful — thanks for the thoughts!

  9. Leigh says:

    All the appliances in my ~1000 sqft two bedroom condo could die any moment. (They’re all past their expected life span…) So I keep about $10k extra in my emergency fund to cover that. This year, we have replaced some light switches ($90), painted one room (~$110 with supplies), replaced a damaged bathroom vanity ($700 + $200 for faucets and some $ amount for installation), repaired the fridge for $200, and all of the light bulbs with LEDs over the last couple years (~$300). We’re also going to UV proof the windows, which will probably cost about $200, do a couple electrician tasks for about $300, and re-seal the granite in one of the showers for which I think I spent $80 on supplies. We also spent a day cleaning all of the windows and haven’t cleaned the balcony this year like we usually do because of the other projects. This year has been relatively expensive… Up until this year, I only did “fun” maintenance like installing closet organizers and a ceiling fan.

    That said…I mostly really enjoy homeownership. I did put 20% down from cash savings accounts and had 12 months expenses in cash when I bought the place, so I had about $100k in cash when I put in the offer on my place. Housing here is just plain expensive, so it’s nice to not have huge rent increases every year.

    1. thesingledollar says:

      The last point I love — it must be so nice to have some stability in housing costs! Also I really love the idea of fun maintenance. Closet organizers are wonderful, aren’t they? Thanks for the detailed account of this year’s maintenance — that’s the kind of thing I was wondering about.

  10. Chonce says:

    I’ve never been a homeowner before. But I’d imagine it’s like financing a car x15 with having to pay the actual mortgage + repairs and upgrades. The more I learn about it, I wouldn’t even consider it until I become debt free and have at least 6-8 months’ of living expenses in the bank.. Preferably more.

    1. thesingledollar says:

      I know, it seems really scary, doesn’t it? I’m not sure I’m emotionally ready to take that plunge.

  11. The housing market around here is pretty flat. Is it that way where you live? If so, there is absolutely no rush. Keep on saving hand-over-fist, and there will come a time when buying a house will not seem so daunting – simply because you’ll have such a fabulous down payment. You are wise to think in terms of being able to support a home on your own if you buy one. I have a friend who relies on having a boarder, and it’s very stressful for her when there is a change in boarder and a month or two of no additional income. So my vote is to wait (especially if the housing market where you are is flat).

    1. thesingledollar says:

      I totally agree — I would not want to rely on the rented room thing. My idea is that I would put any rental income I did receive into a maintenance fund; I’d pay the mortgage etc myself, and the rental income would be for replacing the roof, and so on. As for the market, it seems relatively flat, though the city is developing and it might be poised to rise a bit. Probably not out of reach though. But the first order of business is just to figure out if I’m staying in town or not!

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