How much does it really cost to own a home in Los Angeles county? (part one). This post was inspired by a post from Marc Swartz, his list is great but I realized that many items listed do not apply to my area, remember all real estate is local. I am a Realtor in the Los Angeles county area and have created my own list of expenses incurred in owning a home in the Los Angeles area. For instance, #3 on Marc’s list is HYDRO but I think he’s from Canada, so it must be a Canadian thing! lol! We don’t have HYDRO in Los Angeles county or in California or in the US for that matter. I don’t even know what it is. Never forget that all real estate is local, I can’t seem to say this enough.
Also, keep in mind that YOU are not going to have ALL these cost on my list or anyone’s list all at once or even at all! For instance, in Los Angeles county, we don't have Snow! at least not in the most areas, unless you are buying a home somewhere in the Mountains! So #13 (Snow removal) on Marc list doesn’t apply! I don't have a Maid or a Pool...so # 15 and #19 are not a problem for me...lol!
If you are interested in knowing all the cost associated with owning a home outside of Los Angeles County, please contact a local Realtor. He or She will be able to give you better information about owing a home in your area!
So, here's my list for the cost of owning a home in Los Angeles County:
1) Home Loan: Interest and Principal payment (100% of all the interest on a home loan is tax deductible). If you have a fixed rate home the first 5 to 7 years most of your payment is interest. Please check with your tax advisor for more details on your particular situation.*
2) Property taxes which is based on your purchase price. On a home purchase of $300,000 your Annual taxes would be: $3,750 (all tax deductible). Again, check with your tax adviser.*
3) Mortgage Insurance or (PMI/MI) which is also tax deductible* until, I believe, 2012. If you put down less than 20% most lenders will ask you to buy mortgage insurance to protect them not you. On down payment of 20% or more, you don't have to worry about this one.
4) Fire Insurance or Homeowners property insurance: there is a difference (which by the way, is not tax deductible*). A Fire policy just protects the structure and Homeowners protects your belongings, and has other benefits. Please check with a property insurance agent for better information! If you were a renter, you'd have to get Renter's insurance, anyway.
5) Utilities: whether you own or rent, you'll have to pay utilities anyway! The only utility that a renter doesn't pay and as a homeowner you do have to pay is: WATER! I pay 50 to 60 bucks a month! The cost of water, again, depends on locality.
6) Gardener/Lawn care: You can always find ways to cut down on this expense! I have a small front lawn, and got rid of my back yard lawn and planted herbs, fruit trees, and a vegetable garden and I have a great Gardner who charges me really cheap to maintain the front lawn. So that's not a big expense for me. I pay $25 a month. If you want his number and have a home in the Los Angeles county, call me and I'll give you his number.
7) Termite: Annual contract with most termite companies can run you from $75 to $150 per year, depending on the size of your home. Call around for quotes.
8) Repairs: Yes, you will be responsible for all the repairs, but if you take care of your property--you can keep the cost of these repairs down to a minimum. I have a handyman to do all the minor repairs and only call the plumber on major stuff, but I take care of my plumbing so I rarely have to call him. I don’t flush things down the toilet that I’m not supposed to and I don’t cram everything down my garbage disposal.
9) All the other expenses like: Pool service, snow removal, landscaping service only apply if you have pool, snow, and landscaping! ha!
10) For major repairs such as a roof, outside stucco, windows, fences: I have an emergency fund to cover any future major repairs, which I have yet to use. Most roofs are sturdy and you don't need repairing on a monthly or even yearly basis. If find that your roof needs monthly repairs...then it's time to get a new one. When buying a home, ask how old the roof is and get a professional roofer or home inspector to do an inspection so that you know how much life your roof has left, and plan accordingly.
For me, the most expensive cost of owning a home is: the loan Principal and Interest, property Taxes and property Insurance (commonly known as PITI) but the great thing about the first two is that they are Tax Deductible!* Again, check with your tax accountant or adviser for your specific situation. This is not tax advise and it should not be taken as such, this is just for informational purposes.
You should be aware of all the cost of owning a home but also keep in mind the benefits of owning a home and to me the benefits out-weigh the costs! And I am not just talking about the financial benefits.
And what are The Benefits of owning a home! Well the are too numerous and beyond the scope of this blog....but stay tune....I will soon write a blog about: "the benefits of owning a home!" I hope you come back to visit my blog and let me know if you enjoyed reading my stuff.
*Disclaimer: This is my “personal” opinion and is not intended to be legal or tax advise, if you need legal or tax advise, please seek the services of an appropriate professional. I have taken special care to provide you with reliable information which may have been derived from another website but I do not guarantee the accuracy of the information on any other website or this post. The intention of my post is to inform not advice you, so nothing in this post should be taken as advice! I am a professional Realtor® and California real estate broker (DRE#00972295) who has been helping homeowners with all their real estate needs in the Los Angeles County area, since 1987. If you need my help to buy or sell a home or investment property in the Los Angeles County area, please feel free to call me at: (562) 916-3237 or email me at PintoRealty@yahoo.com. © Aida Pinto 2011