03/04/2022
In 2022, do you have plans to become a first time homebuyer or real estate investor?! Read on⬇️
💥First time homebuyers💥: Let's talk about home ownership costs. Owning a house is expensive and the last thing you want to be is house-broke!
It's easy to underestimate the costs of buying a house if you haven't done it before. You might think that you just need to come up with the down payment. But you also need to factor in the closing costs, inspection, appraisal, moving costs, furniture/decor, etc. That's a lot of moolah. 💰
There's also ongoing expenses: utilities, pest control, lawn care, HOA fees, and maintenance. It never ends!
Speaking of maintenance, this diagram shows the life expectancy of various systems and appliances in your home. This can help you better prepare for some of those bigger expenses that will come up in 10-20 years.
💥First time investors💥: Let's talk capex. Capital expenditure is often forgotten or underestimated by real estate investors. Big. Mistake.
Investors should set aside a "capex" amount into a savings account for big ticket items (like the ones shown in the diagram) that will need to be repaired or replaced over the long-term. Think: roof, windows, furnace, etc.
This capex amount could be anywhere from 5-12% of rent revenue. If you don't set this aside, your rental property projections will look more profitable than it is in real life. (And you'll have some major regrets 🥲).
👉 What other expenses should first time home buyers or investors expect?
