To some people, the defining moment of entering adulthood is purchasing a home. This means you’re finally settling down, you’re financially stable, and you’re ready to make a big commitment. However, this exciting time can also be extremely stressful if you aren’t fully prepared for what it means to be a homeowner.
Transitioning from renting to owning a home is a big jump. Everything is now your responsibility, for better or for worse. While this can be freeing, it can also be overwhelming. So to help those considering moving from renting to owning, here are three things to think about before you give up your rental and purchase your first home.
The True Cost of Home Ownership
When thinking about how much you can afford in rent and how much you can afford to pay for a home, it’s important to make sure you’ve accounted for all the costs. According to Geoff Williams, a contributor to U.S. News and World Report, owning a home has additional costs like taxes, insurance, fees and maintenance. Not only these costs, but you’re now also responsible for taking care of every aspect of your home, which means you may have to make some larger purchases like buying a refrigerator or lawn mower as well. Consider how all this costs will affect your budget before you make the decision to buy.
Maintaining a Home
Like was mentioned above, once you own a home, the sole responsibility of maintaining that home falls to you. While you can call in professionals to fix things that break or malfunction around your property, it’s also a good idea to know how to address some common problems yourself to avoid having to pay money for things you could fix on your own.
Zillow.com reports that some of the most common skills homeowners should possess for maintaining their home include turning off main water valves, cleaning gutters, changing furnace filters, finding studs in the walls and flipping breaker switches on and off. By having these skills, you can troubleshoot a lot of the problems you might face as a homeowner and save yourself some money.
Although you may feel excited at the prospect of owning your own home, it’s important that this purchase makes sense with your personal timeline. Landon Dowdy, a contributor to CNBC, writes that if you plan to move in the next few years or aren’t sure how long you’ll be staying at your current job, purchasing a house might not be the best move for you. While you can always sell your home, you’ll get the best return on your investment if you’re able to stay for at least five or so years. This gives you time to recoup the money you paid for the home and let the home mature within the market.
Going from renting to buying will help build your investment portfolio as well as teach you some great life skills. If you feel like you’re ready to take this next step, use the tips mentioned above to help you prepare.