Over 5 million people bought a home last year. However, new homeowners might not know that owning a home costs more than the initial buying price. There are hidden costs that you may not think about.

It’s best to know about these hidden costs before you buy a home and have to pay those bills.

Here are five homeowner expenses you should be aware of.

1. Homeowners Insurance

You need homeowners insurance if you plan on taking out a mortgage on your home. You’ll be thankful to have it if something happens to your home.

This insurance is helpful if your home ever gets robbed. The home insurance is also helpful for accidents like fires. Your insurance will allow you to rebuild your home and replace your personal items if need be, as long as they are covered by your policy.

There are three different ways to ensure your home; actual cash value, replacement cost, and extended replacement cost. With actual cash value coverage, you will get the money to replace your home. The coverage is for the cost of the home minus any depreciation that exists due to use and age.

The replacement cost doesn’t have any deductions due to age or use. There is, however, a max value that can have coverage and it might not cover everything. The extended replacement cost works similarly but can cover over 20% over the limit.

Expect to pay over $1,000 for this annually. While homeowners insurance is expensive, there are certain discounts that you might be eligible for.

Ask if there is a discount if you work from home, or if you have a security system. There could even be a discount if you bundle your home insurance with your car insurance.

Remember, you can see if you can pay your homeowners insurance in installments or even annually if you aren’t required to pay them through your escrow account.

2. Regular and Emergency Maintenance Costs

Keeping everything up and running efficiently in your home is a big task. From fixing an old air conditioning unit to replacing a leaky roof, maintaining a working home can take a chunk out of your wallet.

Plumbing, yard work, gutters, and appliances are some of the things you’ll have to spend money on as a homeowner.

One tip to try and save some money is not to always outsource and find a professional to fix what’s broken. Simple things that break in your home you can fix yourself instead of hiring a professional. This will save you money over time, and when you really do need a professional for something, you will be able to afford it.

Try to start making a rainy day fund for these types of emergencies. If you put away a little money every month, it will come in handy for when everything starts to break down in your home.

3. Property Taxes

You will have to look up how much your specific property taxes are by county. Property taxes change depending on the state, city, and house that you live in.

Some mortgage loans have backing by the Federal Housing Administration. Therefore, you need an escrow or impound account.

There will be an assessment for property taxes on your home according to a sales evaluation, the income method, and the cost method. The sales evaluation means that someone will try to value your home based on many things including similar sales of homes around yours.

Someone will evaluate your home using the income method based on the rental income that you could make if the home had any rental income. The cost method is when whoever is assessing your home sees how much it would cost to replace the property. The cost method also depends on if any depreciation has taken place.

4. Utilities are a Part of Homeowner Expenses

Utilities can be a few hundred dollars a month, adding up to thousands of thousand dollars a year. The amount you will spend on utilities depends on where you live and what you need for your specific home.

Utilities you can expect to have are:

• Water
• Lawn Care
• Electric
• Gas
• Sewer
• Cable and Internet
• Pest Control

If you want to know how much to expect to spend on utilities at your new place, think about asking a prospective neighbor if they mind sharing what they spend on utilities. This will help you get a good idea as to what you can expect moving forward.

5. Homeowners Association Fees

Depending on what type of property you buy and where it’s at, you might have to pay some homeowners association fees. These fees are common when purchasing condominiums. Homeowners association fees are also common practice for private communities of single-family homes.

An average homeowners association fee for a single-family home in the U.S. could range from around $200-$300. Typically, the fee goes up if the subdivision or community has many common area amenities like pools, clubhouses, and tennis courts.

Before you move into a home in a private community, it’s best to see if there’s a homeowners association fee. If there is a fee, make sure it’s within an acceptable range and that it fits into your monthly budget.

Be Aware of These Expenses

It’s important to be aware of these hidden homeowner expenses before you buy a home. It makes choosing the right home easier when you know what all you need to pay for down the road.

Bonnie Roberts Realty provides helpful real estate advice for home buyers, home sellers, and real estate agents.

Take a look at our blog for more homeowner tips and real estate advice.