The average home buyer in America spends over $6,000 within the first year of home ownership sprucing up the place and adding things that were not included with the purchase. For example, when my wife and I purchased our first house about two years ago, it did not come with a garage door opener, blinds on any of our thirty windows, or a fence around the backyard. We were lucky that we already had a washer and dryer that my parents bought us years ago, and we managed to negotiate for our homebuilder to buy us with a refrigerator. You would think that if I could negotiate for a fridge that I would have remembered the fence, door opener, and blinds. Whoops!
New home buyers who have not previously owned any real estate may not take into consideration all the additional items they will end up buying as a result. I know I didn’t. First time home buyers purchase a lot of items that they never had to own in the past. Plan on buying if you do not already own one, a washing machine and dryer, refrigerator, stove, leaf blower, lawn mower, shades and curtains, a fence, other power tools needed, etc. And, of course, these are not cheap items either. A good privacy fence can cost up to $5,000 or more depending on the size of your yard. Blinds cost several hundred dollars to outfit an entire house, and that is assuming that you do the labor yourself. The same can be said for a garage door opener, and heaven forbid if you have to install two or three if you have a big garage. And, a decent washing machine and clothes dryer can cost between $500 and $1,000 for the pair.
A few ideas to tackle the problem…
Buy A Home With Price Below What You Can Afford
A new home owner can become house poor in a hurry if he or she does not anticipate all the new associated costs involved in owning a piece of the American Dream. No wonder people wind up using their credit cards to finance add-ons that were not budgeted. Rookie home buyers, like my wife and me, do not often factor in these additional items before they make an offer and purchase a home. Therefore, it is definitely a good idea to buy a home that is listed below the amount you have been approved for by the bank. Save some of your down payment when you purchase a cheaper home as a means to spruce up your new digs. Then, you will not even need to tap into a credit card or other line of credit. Give yourself some leeway with respect to expenses.
Save Up With A Move In Fund
Just like you save for a down payment for your new home, a new home owner should also start saving for the upgrades and purchases that need to be made in the first year as well. This might be a good use for a large tax refund. Or, you could set up an online savings account through a company such as ING Direct and even name the savings account something like, “Privacy Fence & Blinds”.
Owning a piece of real estate is still an important part of the classic American Dream. Owning a home is an accomplishment that you will be proud of for the rest of your life if you pick a home that is affordable and you consider the additional costs of ownership that are normally forgotten about by new buyers. Anticipate your total costs and additional ones as well, and you will enjoy your property just that much more.