Sarah purchased her first home in 2020 and is here to share her experience.
Three Downsides of Owning a Home
Everyone dreams of owning their first home since it's that big step into becoming a real adult. However, most people don't realize that there's so much work that goes into owning a home, not to mention all the paperwork you have to do to purchase it. In this article, I will talk about three disadvantages of being a homeowner based on my experience.
- Paying a Lot of Taxes
- Dealing With an HOA
- Handling Maintenance Yourself
1. Paying a Lot of Taxes
Something people don't really talk about when owning a home is how much taxes you end up having to pay each year on your house. When I purchased my home in the fall of 2020, my taxes were very low because the previous owner had a very low tax to pay each year. I only had to pay $45, and I thought to myself, I could do this because it was so low.
My mortgage lender at Wells Fargo did inform me that the taxes would go up in 2021, but I wasn't worried about it. I didn't think it would go up that much, and even if it was around $500, I had the money in savings to cover it. Also, I make enough every month that even without taking from savings, I would have enough for my taxes.
However, I wasn't prepared for how much my taxes went up in 2021. My taxes went up almost $1500 in 2021, and I really wasn't expecting that. I never knew that taxes on your home could be so expensive, and no one really prepared me for that. I currently live in Florida, and wages here aren't as high as in places like California or New York, so I never expected to have to pay so many taxes on my house.
Now I'm trying to save up for my house tax, but I also pay normal taxes during tax season, so it's really difficult. For people that don't earn a lot of money but own a house, it can be very hard and almost impossible to save that much money every year.
Thankfully, you don't need to pay all this at once because your mortgage lender will pay the house tax upfront for you. However, the mortgage lender isn't really doing you a favor. Paying upfront will save you from losing your house if you can't pay all your taxes right away, but this ends up almost being like a loan to your mortgage lender.
Now you have something like a loan on top of your mortgage, and this causes your monthly payments to go up by a lot too, so it's not really beneficial. The mortgage lender will give you a whole year to pay it back, so you pay only a little at a time. I wish that people that were already homeowners would've told me this before so I could've been more prepared.
2. Dealing With an HOA
Many houses nowadays are in communities run by an HOA, which stands for homeowners' association. The HOA is responsible for making sure the community looks pretty and public spaces are running smoothly. For example, the HOA makes sure that the grass is neatly cut once a week, the roads don't have potholes in them, the lights have electricity so that you can see when you're driving home at night, and public spaces like pools are clean.
Unfortunately, all this maintenance in the community isn't free and you have to pay a fee to the HOA every month. This fee is almost like rent on top of your already expensive mortgage. The amount of the fee is also dependent on the community that you live in. For example, if the houses are huge like mansions or you're living in a beautiful timeshare area, the HOA can be anywhere from $300–$500 per month.
However, if the area isn't as populated and the houses are just average, the HOA is usually around $150–$250 per month. This definitely makes owning a home more expensive because if you don't pay the HOA fee, the community is allowed to kick you out of your home.
Also, you have to adhere to strict rules while living in an HOA community. For example, you're not allowed to paint your house a different color, plant things, or make any adjustments to the outside of the house without the HOA's approval. Also, the HOA expects you to keep your house in an optimal condition at all times, and if the house isn't, the HOA is allowed to charge you a hefty fine that you are required to pay to them. HOAs also tend not to be very kind and are difficult to negotiate with or talk to.
My HOA isn't very kind, and they often don't respond to emails and are only available to talk to in person on Wednesdays for a few hours of the day. Therefore, even if I have an issue, I can't even contact them. I also almost received a fine of $1000 because the outside of my house was dirty. I ended up having to buy a power washer to clean the back of my house to prevent having to pay this huge fine. These are things that no one told me about before buying my home.
My mortgage lender warned me that HOA fees are expensive, and I would need to take that into account when choosing a home. However, he didn't tell me about how strict the HOAs are and how difficult it can be to get along with them.
3. Handling Maintenance Yourself
Everyone knows that when you own your home, you need to do any maintenance or repairs on your own. I knew this when purchasing my home but wasn't prepared for all of it. For example, when renting, if the washer breaks or the refrigerator isn't working, you can just call the maintenance number or submit a request online, and someone will come to fix it soon. However, when something breaks in your own home, you have to be the one to go out and buy the necessary tools to fix it, or if it's completely broken, you have to spend the money to buy a new one.
As a homeowner, you can hire someone to come repair things for you, but that can cost a lot of money, so most people prefer to just do it themselves. Thankfully, my husband is a handyman, so he has been able to fix most issues in the home. However, we have to spend the money and time to go to Home Depot or Lowe's to purchase what we need.
I like the freedom of being able to change the interior and make it whatever I want it to be, but there's a lot of work and money that goes into that. Also, if something breaks in the middle of the night and the stores are closed, you have to wait until the next day to fix it.
When living in an apartment, there's an emergency number you can call for maintenance issues like flooding or broken AC that's working even during the late-night hours, and someone will come to fix it for you as soon as possible. However, when you're a homeowner, there's no emergency maintenance guy, the emergency maintenance person is you, and if the stores are closed, there's nothing you can do to fix it until the morning. Therefore, having maintenance to help is something I definitely miss about renting.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2022 Sarah Wong