Buying a new home is often a scary and exciting time in a person’s life. It is a big step up from renting, but it is typically a much better financial decision than continuing to sink your money into rent. Homeownership is ideal and a much smarter use of money, and it can even help you reach your financial goals.
Still, there are many financial factors to consider when buying a home. You’ve likely given due thought to things like down payments, interest rates, closing costs, etc. But what about the lesser-known financial impacts?
While most homeowners factor in the usual costs listed above, they don’t tend to think about the off-the-wall or more unusual factors that can ultimately play a part in how much money you spend monthly or annually on living expenses.
This article will review some of the more uncommon or less-considered situations that should factor into your home buying process, and how they can impact your finances.
1. Is the Home in an Area Affected By Natural Disasters?
Most people factor emergency situations into their savings. It’s always wise to have an emergency fund at hand in case something happens. However, people don’t tend to think of natural disasters when they think of emergencies that they could end up needing to pay for.
Things like car repairs, medical emergencies, and more minor home repairs are reasonably standard things to save for. But most people do not consider what it would cost them if they were to suffer from a natural disaster.
Generally, when buying a home, we try to stay positive and think of all the good things we like, and if we do look out for the things we don’t want, it tends to be along the lines of the kitchen being too small, the neighborhood being unsafe or having a low walk score, or the backyard not having a fence. We don’t tend to think about whether the area is affected by natural disasters and if the home is built to withstand an earthquake or a tornado.
Emergencies like this, however, should be something that potential homeowners consider more often when house hunting. Though these types of emergency situations might not happen that often, your finances can take a huge hit when they do, especially if you aren’t prepared. If you do choose to live in an area that has the potential to be hit by a natural disaster, it’s important that you factor this into your savings and make a plan to prepare your home for emergencies to mitigate extra costs.
2. Is the House in a Remote Work-Friendly Location?
As more companies move towards hybrid and remote work options, this should also be something to consider when looking into buying a new home. Even if you don’t currently work remotely, there is always the possibility that you could end up having to — whether it’s due to another pandemic situation, because your company is changing its policies, or because you end up getting a new job that only operates remotely.
The house you choose to buy could factor into how you live and work, and the costs associated with these things. If you are looking to move to a new area and will need to find work in that location, for example, keep in mind that not all states or cities are as remote-friendly as others. Just because the house might check all of your boxes in other ways doesn’t mean it will be conducive to a remote-work lifestyle.
If you move to a state that doesn’t withhold state taxes from your income, for example, it can be more ideal for your finances because working from home in that state means you get more money on your paychecks. Something else to consider is that some companies that hire remote workers prefer that their employees live close by. So if you will be looking for a new remote job, make sure the home you choose is in an area where you will be able to find work.
3. Does the Neighborhood Have HOA Fees?
Homeowners Association (HOA) fees are still reasonably common in many neighborhoods but are often something home buyers forget to factor in when looking at where they want to live. Condominium developments, townhome complexes, and gated communities are highly sought after because they are typically well-kept, safe neighborhoods to live in.
However, what isn’t so nice about some of these areas are the HOA fees that come along with them. So it’s always best to check if there are HOA fees included when looking into a new home. Even some standard, general neighborhoods that you wouldn’t suspect to have these fees do, in fact, have them. And some places will purposely try to hide this from potential buyers and then drop the fees on them at the last minute once the buyer is already committed.
4. Is the Home in an Environment Conducive to Your Health?
If you struggle with your health or have any conditions that require frequent visits to the doctor, this is also something to consider when buying a home. There are many things that could negatively impact your finances and raise your cost of living if you don’t choose a home that is conducive to your health and physical condition.
If you make frequent trips to the doctor, for example, you will want to choose a home that is nearby. The air quality and other factors in the area you choose can also impact your health. Even if you aren’t chronically ill, you could develop allergies or struggle more with your health in general if the home you choose is not in a clean and healthy environment.
Where we live can also significantly impact our mental health. If the home is dark and doesn’t get good light or is in a noisy area, these things can ultimately affect how you feel while living in your home. And while it might not seem like it, if your home and its location impact your physical and mental health, it can significantly affect your finances over time.
5. What Kind of Pests Are Native to the Area?
Homebuyers rarely consider this when house hunting, but local pests can be a nuisance, and dealing with them constantly can affect your finances. Pest control today is not cheap, especially if you are dealing with a pest that is more difficult to get rid of.
Things like ants and cockroaches are not fun, but these common pests are a little easier to deal with. However, there are numerous other pests that can be a serious problem depending on the area you live in, and it can end up costing you a lot of money to have them dealt with. Rats, termites, poisonous spiders, scorpions, and various types of beetles, for example, can all be hard to get rid and some of these can also pose a risk to your health.
So when looking for a new place to live, don’t forget to ask about pests native to the area or do a bit of research yourself to find out. The last thing you want is to get settled into a new home only to find you’ll be sharing that home with some less than desirable, uninvited pests.
Homeownership can be a wonderful experience. Even with the added costs, it is often well worth it when it means being able to manage your own home. And If you are smart with your spending, owning a home can ultimately save you money because it is an investment as opposed to renting, which involves throwing your money away on something you will never own. Just make sure you consider all potential costs and things that can affect your finances, like the things listed above, to ensure it is truly the right home for you and your financial situation.