But many people arent aware of thehidden, costs associated with both owning ANDrenting a home, and its what you dont knowthat has the potential to derail your rent vs. buydecision-making, so here are the Top HiddenCosts of both renting and owning your home:
1.Special assessments. Condo fees to maintain thecomplex come as no surprise to condo owners, buthefty special assessments to make unexpected (andunbudgeted) repairs to the roof, windows, boiler oreven foundation often catch unit owners unawares.Even if your home doesn’t belong to an CondoAssociation, don’t be surprised to see specialassessments tacked on top of your property taxbill, covering public services including things likestreet lighting, tree trimming, pestcontrol, libraries, and even schools.
2.Utilities and services you didn’t need whilerenting. Many renters have never had to pay forthings like gas, garbage, water and landscapeservices.
3.Mortgage insurance. Today’ssavvy homebuyers are wellaware they’ll have to pony upfor mortgage insurance, if they’reputting less than 20 percent downon their mortgage. the cost of MortgageInsurance has gone up over the last year, andthe amount definitely catches buyers off guard.
4. Penalties and fines. Condo rule violations, likeparking in the wrong spot, installing hardwood floorsin an upstairs unit, or painting your home aforbidden hue can result in surprising fines, on top ofthe costs of remediating the issue. Even single-familyhomeowners can get ticketed and/or fined by theircity or town for violations like having overgrownweeds or other building code violations – especiallythose which create fire and safety hazards.
5. Items you didnt need while renting, but youdo as a homeowner. This varies based on yourclimate and the type of home you own, as wellas on the services you outsource, but caninclude landscapingequipment, washer/dryer, fridge, windowtreatments, and light fixtures.
1.Opportunity Costs. When you rent, you loseout on the chance of equity – which can meanan increase in your home’s value but, even in adown market, can also mean the chance of everowning the place you live free and clear.
2.Storage. Many a renter simply has too manypersonal belongings to stuff into their smallapartment, so it’s not uncommon for tenants toalso pay for a storage space, without calculatingthat expense into their “housing” budget.
3.Costs of improving the property. Long-termrenters may paint, replace the flooring, and doother improvements to make the placelivable. But since it’s not technically “their”home, when they do move out, all the cash theyinvested is lost. In fact, some landlords mayrequire them the pay or forfeit deposit money tobring the place back to its original, décor.
4.Lost deposits. Anyone who has rented morethan a couple of apartments is well aware of thechances of losing some or all of your securitydeposits, no matter how well you care for yourhome.
Randy BettInvestment Realtor/Author/InvestorReal Estate Professionals Inc.Better Group Real Estate202-5403 Crowchild Trail NWCalgary, AB T3B 4Z1Phone:403-774-7464 Ext:1Fax:403-208-0082Toll Free fax:888-711-6801