A house is a valuable asset yet there are several hidden financial costs which add stress on home owners.

1. property taxes

Property tax is in fact a guaranteed permanent annuity which requires home owner to pay for the place they live in once a month or once a quarter. Property tax is decided by the government of home owners’ residence and it is levied according to the value of the house. Property taxes normally cost home owners $500 to $1,000 a month and the costs keep rising in recent years.

2. HOA and Condo fees

HOA and Condo fees are the costs that home owners need to pay if they purchase their house within a homeowners’ association (HOA) or a condominium association (Condo). These costs are based on the things that serve the whole neighborhood. If home owners’ neighborhood needs to increase the expenditure, the fees may increase at the same time.

3. Homeowners insurance

Most banks or mortgage companies require home owners to purchase homeowners insurance before lending the money to them. This cost is included in home owners’ monthly payment and it will rise annually or when home owners choose to increase coverage. Homeowners insurance, together with property taxes, is usually known as PITI, should be less than 28% of home owner’s monthly income. Note that even if home owners have paid for their homeowners insurance, they still need to purchases another coverage for natural disasters, such as earthquakes, floods, and hurricanes. This additional coverage can be extremely expensive and highly deductible.

4. Broken roof

A broken roof, no matter it is loose or leaky, can cause huge damage to the house. In the United States, asphalt shingles are the major materials of roof. Some of them are poorly constructed at first and some of them are broken when they reach their maximum life span. In this case, home owners should replace the shingles to keep water away from their house, at least once every 20 years.

5. HVAC system and electrical system

HVAC system refers to heating, ventilation and air conditioning system. Home owner should at first make sure that both HVAC system and electrical system are properly installed. Later on, they should hire certain people to check the appliances once a year to avoid any potential dangers and to keep them running efficiently, which will no doubt cost them some money.

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