Real Estate Home Finance

10 (Major) Costs Every Homeowner Needs to Be Prepared For

Owning a home is usually a good investment, but buying one can be a huge financial risk if you're not prepared for the costs that come with ownership—costs that range far beyond the mortgage payments. While most homeowners are prepared for recurring expenses like utilities, or maybe the replacement of the occasional dishwasher or stove, many are surprised by some of the other significant costs that can crop up. Read on to learn about 10 major costs homeowners regularly face, and how to prepare for them.
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Plan Ahead

When you own a home, you need to be prepared for the unexpected. Otherwise, you could end up having to take out a home equity loan or liquidate your retirement account (and pay the penalty for early withdrawal) to cover surprise expenses. Financial experts recommend opening a savings account and stashing away enough money to cover three to six months of typical household expenses. That way, you’ll always have a cushion when major costs arise. 

Property Taxes

Most home buyers realize that they’ll have to pay a percentage of their home’s value toward state and local property taxes, but for some, those taxes can be a big expense. According to Business Insider, property taxes can run, on average, from as little as $560 per year in states like Arkansas to as much as $7,800 per year in such states as New Jersey. If property tax isn’t included in your mortgage payment, divide the annual assessment by 12, and put that amount of money in a separate savings account every month.

Heating and Cooling Problems

During the home-buying process, an inspector will check out the home’s HVAC system for problems, but if the furnace is nearing the end of its useful life (15 years, on average) or the air conditioner is almost 12 years old, you may soon need to replace one or both of them. A new furnace runs an average of $4,500, and a new central AC unit costs an average of $3,800.

Roof Repairs

The roof is a crucial element of a home’s protective envelope, but it’s also one of the most easily damaged by hot sun, high winds, hail storms, and other violent weather. Many homeowners insurance policies will cover damage to the roof—but only after you pay a deductible. Depending on your policy, your deductible could be as little as $500 or as much as $5,000.


No one plans to lose a job or become injured, but if you do end up out of work, your monthly expenses will continue to pile up. You may be able to collect unemployment insurance or disability compensation, but if you don’t have enough money to pay your mortgage and other expenses, you could end up losing your home.

Loss from Theft

If robbers strike your house, homeowners insurance can help out, but only after you pay the deductible. As well, it may pay only for the value of the items you can prove you owned. The best way to ensure that you recover the value of your stolen property is to make a detailed home inventory, complete with photos, receipts, and videos, and keep it in a safe deposit box. Without an inventory, you could find yourself having to pay out of pocket to replace big-ticket items such as PCs and large-screen TVs. 

Pest Control and Repair

Those little piles of dust along the floorboard and those tiny pinholes in the wall could be indications of a termite infestation. Most homeowners policies don’t cover termite damage, and depending on the extent of the destruction, you could be on the hook for $10,000 or more in structural repairs. You’ll also need to have a termite company eradicate the little pests, which could run an additional $400 to $2,500.

Landscaping Costs

Maintaining your landscaping takes time and money. If you’re willing to do the mowing and occasional feeding and seeding yourself, you can have a lush, tidy lawn on the cheap. But if the existing grass is in bad shape, you could pay between $3,000 and $15,000 to have a new lawn professionally installed. And the lawn is only one part of your landscaping costs. Dead tree removal ranges from $300 to $1,000 or more per tree, and having a sprinkler system installed could set you back as much as $4,000.

Security System

Keeping your home and family safe is always a top priority, but peace of mind can come at a steep price. A monitored security system can cost up to $1,000 to install, and the monitoring itself can require an additional $20 to $65 per month. You can save money over time by installing your own smart home security system, but expect to lay out $800 to $2,500 for the necessary cameras and other components.

Foundation Issues

The structural integrity of a house depends on its foundation, and if there are problems with the foundation, repair costs can be quite expensive. You could pay as little as $1,000 to have the wall of a leaky basement patched and sealed, or as much as $25,000 to have shifting foundation walls excavated and stabilized.

Water Damage

A slow leak in a roof or around a window isn’t always noticeable right away, but over time the constant trickle of water between the walls or into an attic can lead to extensive mold growth or structural damage, which could cost thousands to remedy or repair.