Perhaps one of the biggest factors that goes into purchasing a home is the square footage. Most prospective buyers often aim to find the biggest home possible at the budget that they can afford. Some buyers get carried away with visions of sprawling out in a luxuriously large home, but don’t consider the underlying costs that come with this bigger investment that can lead to negative financial consequences in the future.
Having a bigger home means more space for activities, ability to entertain guests, and customize rooms and areas for your own enjoyment. However, it also means higher monthly bills, more maintenance, and higher levels of risk. Before making the decision to go for the more spacious home, consider these factors:
Utilities Bills Are Higher
One thing to think about when considering a bigger house is the extra cost of utilities. A large home means more area that needs to be heated or cooled, and as a result requires more energy. This can translate into an extra several hundred dollars a year, depending on the size of the home. Some estimates claim annual utility expenses equate to roughly $1.37 per square foot, so an extra few hundred square feet could really add up.
Always ask the seller or seller’s agent to see a copy of recent utility bills, including water, electricity, and gas in order to get an understanding of how much it could cost.
Home Maintenance May Be Difficult
Another factor to look out for is the extra maintenance costs that could arise for a bigger home. More space, potentially, means more opportunity for something to go wrong. Especially in a larger house, this generally means repairs are more expensive to do as well.
Even if there is nothing wrong with the home upon purchasing, a couple years down the line you may need to repair or replace the roof, windows, plumbing, or other core components. Before buying a bigger home, make sure you’re prepared to pay for any maintenance problems that could come up.
Initial Purchase Price
One thing excited homebuyers sometimes forget to consider is the impact that a higher purchase price can have. Aside from the immediate increase that is seen on monthly mortgage payments, prospective buyers should consider that a higher price also means higher interest payments in the long run. That extra $100,000 spent on buying a bigger home could translate to much more, especially when interest rates accrue on the larger amount.
Home Insurance Premiums and Property Taxes
With a bigger home, comes more space that needs to be insured and taxed. Although the specific amount varies depending on the size of the home, homebuyers should always consider that they will be paying more to be able to insure the larger home.
Even if you get the best rates on homeowners insurance, premiums can still vary considerably and is a cost that should be heavily considered.
More Space That Needs Filling
More space and rooms in a bigger house also means more space to fill. Whether the need for more furniture, specific decor, or other installments based on your interests, these costs can add up quickly.
The feeling of buying a new home is always exciting and exhilarating, and many homebuyers can get distracted in the process. Sure, owning a bigger home is the dream of any prospective buyer, but it is crucial for these individuals to consider the underlying costs in order to know exactly what they’re getting into. By fully understanding the added costs of a larger home, buyers can make the decision that is right for them.