How to Reduce the Cost of Homeownership

Real Estate Agent with One Click SEO

Relatively low mortgage rates have rekindled interest in homeownership, particularly among young people who are fed up with rising rent costs and would like their money to go towards building equity rather than lining their landlords' pockets.

A home can be a valuable asset that will lead to financial stability. But first-time homebuyers might be surprised at the financial impact homeownership can have on their pockets.

The hidden cost of homeownership

The hidden costs of homeownership can add up quickly. Adding these expenses to the monthly mortgage payment is how some first-timers become “house poor”. They do not properly anticipate these costs and it raises their monthly bills to an uncomfortable level.

And while some of these hidden costs are completely out of their control, some can be reduced. Knowing how to do so can make the experience of owning a home just a little bit less stressful.

For the following “hidden costs that you have little control over” some might say, “But I can get a cheaper insurance company.” Yes, that much is obvious, but you still need to pay someone for insurance. Therefore, that cost is pretty much fixed.

Hidden costs that you have little control over

property taxes

Property taxes

Property taxes are required for homeowners. The property tax is not set by the bank. It is the municipality, county, or city in which the property tax is assessed.

Property tax is essentially a guaranteed payment for life. And other than a few exceptions, you have no control over how much it will be.

Condo Fees and HOA

A monthly or quarterly fee will be charged if you purchase a property in a homeowners association (HOA), or a condominium. The fee covers services that benefit the whole neighborhood such as snow plowing or garbage collection.

The fees for HOAs can go up or you may have to charge an additional assessment for projects like repaving the lot, installing a security system, or transforming common areas.

Homeowners’ Insurance

Homeowners' insurance should be expected as it is required by banks and mortgage companies before they issue you a loan. The premiums will likely be added to your mortgage payment. Your escrow account usually pays your homeowner's insurance premiums.

Keep in mind that premiums may rise each year, or if you add coverage to reflect an increase in the value of your possessions and property.


Termites love moisture and wood, so they can easily get in through the smallest cracks. So if you don’t want your home to turn to dust, you will need termite pest control.

Depending on where you live, a termite service may be required to get approved for a mortgage. Even if you’re not required, it is wise to do so. Termites can cause thousands of dollars in damage to a home.


This is probably the most difficult to quantify because it will vary greatly from house to house. Rest assured, however, there will be unexpected maintenance costs.

This is why homeowners always say "It's always something!"

There are many unexpected maintenance costs. You have to seal the driveway, patch the steps, fix cracks in siding, replace or repair the roof, seal the gutters and clean them. You'll need to fix the plumbing leaks, clean filters, seal doors and windows, and drain the water heater. You'll also need to patch the walls, repair the toilets, fix any plumbing leaks, seal your doors and windows, clean the chimney, and repair or replace the flooring.

Hidden costs that you DO have some control over

energy costs

Landscaping and Lawncare

You will need to pay some money to maintain your landscaping, regardless of whether you hire someone to do it yourself or hire someone to do it for you. Equipment for landscaping can be expensive, but once you make the initial purchase maintenance is pretty low.

This is not just a cosmetic issue. Hanging tree branches can cause damage to roofs and windows. A lot of leaves and overgrown plants can block gutters. This can impact drainage, plumbing, and outdoor HVAC units. These are just a few reasons why HOAs often require members to maintain their grounds.

To save money in the long run, purchase mid-priced equipment and do the work yourself. Cheap equipment breaks sooner and some of the high-end brands are overpriced.

Energy Costs

Everybody knows that the electricity bill is a substantial monthly cost of owning a home. However, there are several ways to reduce that cost.

Switching all light bulbs to LED and putting timers on outdoor lights can help a little, but lighting only accounts for 9% of your monthly bill. According to the Department of Energy, 55% of your bill can be attributed to heating and cooling.

There is one big thing you can do to help reduce those costs. Use high-quality insulation everywhere it is possible. The effectiveness of insulation is measured by R-value. The higher the R-value, the better. Over the lifespan of a home, spray foam will save more energy per inch of insulation because of the spray foam R-value and its durability.

So if you are building or renovating a home and the walls are open, choose spray foam to reduce your energy consumption. Of course, the attic and crawl spaces are always available to switch the insulation.


It is hard work to clean a house. For that reason, more people are having their homes cleaned by someone else than ever before. However, each visit can cost you about $100.

If you want to save that money, keep the cleaning up yourself. One way to make it a bit easier is to divide the house into 5 sections. Clean each section one day of the week (with weekends off). Maybe Monday is bedroom day. Friday might be kitchen day. This way, you never have to spend a lot of time at once cleaning, but you also get to save money!

Pest Control

When you rent, you can call the landlord if you see a pest or mouse. While termite control should be left to the professional, as mentioned above, dealing with cockroaches, spiders, and mice can be done by the homeowner.

If dealing with pests is not what you want your homeownership experience to be, then you can still save money when hiring a pest control service. Prices in this industry can vary quite a bit, so call around. Also, committing to regularly scheduled appointments will usually be cheaper than just calling for random appointments.

The Homeowner

That’s right the homeowner is definitely one of the hidden costs of homeownership. Let me explain. When you buy your new home, you will want it to feel like “yours.” That makes sense, but it comes at a cost.

The amount of money will depend entirely on each individual. You could spend as little as a few hundred dollars for some paint and wall art or several thousands of dollars if you want to redesign your kitchen.

You can save money on this by not going overboard and making wise decisions. If you don’t like your front door, painting it a nice new color is substantially cheaper than replacing it. If your kitchen cabinets need updating, painting them or changing only the doors can save thousands. And there are affordable ways to improve curb appeal too.

The Bottom Line

When most people think about the costs of homeownership, they usually just think about their mortgage payments. Not only must property taxes and insurance be considered, but also maintenance and repair costs.

Just because mortgage lenders won't factor this into their equations when determining a loan amount, doesn’t mean you shouldn’t either. It's a good thing to own your own home—but before you buy, make sure you're prepared for the true cost.

Comments (1)

Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC

Great information on how to reduce the cost of homeownership Dean. Always looking for ways to save money. Thanks for sharing!

Jan 12, 2022 02:29 PM