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The Hidden Costs of Owning a Home

From Homeowners Insurance to Periodic Maintenance, the Costs Never Let Up

© 2012 by Angela Prickette; all rights reserved; content may not be copied, rewritten, or republished without written permission.

A home and piggy bank, photo courtesy Angela Prickette

A home and piggy bank, photo courtesy Angela Prickette

This article was updated on 09/06/20.
Financial experts explain that the hidden costs of owning a home range from initial decorating expenses to daily maintenance charges. According to the National Foundation for Credit Counseling, home ownership delivers personal stability and many financial benefits.

Owning a house is a wonderful and enriching experience and it is one of the biggest investments most of us will make, but the following items are rarely-mentioned expenses. Could it be denial?

Interior Design and Ambiance

New homes are empty, blank canvasses. It costs money to recreate Versailles castle or mimic an island retreat. Paint, drywall texturing, furnishings, and textiles add up quickly when trying to create a personal paradise.


Homeownership means tackling outdoor greenery on a regular basis. Some people enjoy the thrill of mowing grass on the weekends, while others outsource the task to teens or professionals. Myself, I've upgraded to a Ryobi electric mower. For me, it's not about saving the planet, it's the quietness, no fumes, and no lugging around a gas can.


Roofs leak, pipes burst, and other expensive calamities happen without warning. People who do not qualify for traditional loans find relief through alternative financing. Payday loans are increasingly popular and terms vary between states. But buyer beware. Make no mistake about it; these guys are loan sharks. Don't go there if you absolutely can avoid it.

Regular Upkeep and Home Maintenance

Every home eventually starts to show its age. Carpet wears thin, paint chips, and the driveway cracks. Owners need to freshen up their homes periodically to maintain curb appeal and reinstate the “wow” amenities that made them initially fall in love with their domicile.

This is not merely for aesthetic reasons, of course. For most people, their home is their biggest lifetime investment so it only makes sense to keep up with home equity. For example, a simple touch is to install a custom name or number plaque on their door. Real estate agents will tell you that visitor's eyes are first drawn to the front door.

Oh, Those Property Taxes

Purchasing a home offers tremendous tax benefits, but owners are responsible for property taxes. Unpaid taxes are a serious issue that normally results in stiff financial penalties or eviction.

Different states offer ways to minimize the financial burden, even if they are not well advertised. In Texas for instance, owners can file a homestead exemption.

According to the OLR Research Report, in many states, after a certain age (usually 65), owners can apply for a property tax freeze. There's the typical government payperwork, but it is what it is.


There are two types of insurance associated with home ownership. Generally, anyone putting down less than 20 percent of the total purchase price must have private mortgage insurance (PMI). Avoid this if you can.

Everyone needs homeowners insurance that offers financial assistance in the event of a natural disaster or theft. Keep in mind that flood insurance is not included and must be purchased separately if you are located in the flood plain.

If you do suffer a loss and get a settlement, be careful in planning how to allocate your insurance settlement budget.

Property Improvements

Lifestyle changes prompt many property improvements including additional bedrooms or bigger kitchens. Construction projects can be incredibly expensive and it can be hard to estimate final costs. Perhaps the biggest unforeseen expense of home ownership is personal time. Unless someone has the financial resources to hire outside help, they must handle every repair and mundane task.

Despite all the hidden costs, most would agree the positives outweigh any negative aspects. The icing on the cake is that at some time, the home will be paid off and living costs can drop off dramatically.

Renting vs Owning

Many people mistakenly believe that by renting they can avoid these expenses. Not true! They must be paid at some point by the owners and there is no free lunch—the cost is simply passed through to the end consumer. If you rent, that's you. This applies to property taxes so it's a good argument for owning the American Dream.

Knowing the hidden costs of owning a home goes a long way to helping you budget, make decisions, and avoid impulse spending. Do you have any tips that would benefit our readers regarding this topic? Please share in the comment section below!

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About the Author:

Photo of Kelly R. Smith and Frankie, Southern Black Mouth CurKelly R. Smith was a commercial carpenter for 20 years before returning to night school at the University of Houston where he earned a Bachelor’s Degree in Computer Science. After working at NASA for a few years, he went on to develop software for the transportation and financial and energy trading industries. He has been writing, in one capacity or another, since he could hold a pencil. As a freelance writer now, he specializes in producing articles and blog content for a variety of clients. His personal blog is at I Can Fix Up My Home Blog where he muses on many different topics.

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