Often-forgotten and underestimated costs of owning a home — from utility bills to yard care — add an average $9,080 per year to homeowners' tabs, according to a new analysis from real estate site Zillow and service site Thumbtack.
The main costs that make up the $9k include:
- Maintenance (including yard care)
- Property taxes
These are some big numbers, especially when you're comparing home ownership versus renting.
These costs alone add up to over $750 per month. Of course you'd still have utilities when renting (though greatly reduced) and renter's insurance (again, greatly reduced).
But you'd also have your equity in the home invested.
For example, if your home was worth $300k and you could earn 3% on your money, that's another $9,000 a year to the favor of renting versus owning. So you could save $750 (or so) by renting plus earn $750 (or so) by renting, so if you could rent for $1,500 or less, it's a "better deal" to do so (assuming you don't consider home appreciation, mortgage costs, and the like -- lots of variables to consider including non-financial ones like space and lifestyle).
That said, I can see us renting one day. Once the kids are out of college and on their own, we'll have no need for a 3,500 square foot home for two people.
Perhaps we'll sell it and move to an apartment. We'd have much less space but also have more freedom to travel without worrying about someone watching the house while we were gone.
Anyone out there downsized from a house to an apartment? If so, I'd appreciate your thoughts on what you liked and didn't like.