• Home
  • About
  • Advertise
  • Contact
  • Policy
  • Guest Post
  • Archive

One Cent At A Time

A Personal finance blog to get rich

  • Email
  • Facebook
  • Pinterest
  • RSS
  • Twitter
  • Beautiful Life
  • Becoming Rich
  • Beginners Guide
  • Extra Income
  • Productivity
  • Saving Money

4 Ways your House Can Lose you Money

November 4, 2013 11 Comments

Share this:

  • Tweet
  • Email

In this post I will not ask you to not have a house of your own. This post will simply state a few expense that you will be incurring when you are a home owner, probably unknowingly, over your house. Just be aware of them and see if you can somehow put a plug in the hole.

House

After getting the money to finally purchase a house for yourself, the best advice you will give yourself and the best advice you will get from family and friends will be to buy the absolute best house that your money can buy. Following this advice, you look for the best location to buy your house; some of the things you look into include the neighborhood and all it has to offer in addition to the views you will get among other amenities.

Before buying the house, you might have thought that buying a house is easy, simply look for the one you like, pay for it and its all yours! Unfortunately, oftentimes, being a house owner comes with a few headaches of its own, top most being losing money on it, especially since a house is supposed to let you earn money not lose it!

A look at ways in which your house is losing you money:

1: Through taxes

Picture a scenario where you bought a house to make a statement, a house that will show whoever cares to look that you paid top-dollar for it. You figure, let me buy the house at today’s price, sometime down the road, I will be able to sell it for a profit, after all it is a glamorous house in a glamorous neighborhood.

Unfortunately with the house come taxes, which ultimately mean you are losing money on your house.

Take an example of a house bought at $400,000 in an up-scale neighborhood. Depending on the city in which it stands, there is a percentage price levied on properties, meaning that if yours is levied at 2% for example, then when you make calculations, you will have paid over your purchase price.

As if that is not enough, when you finally decide to list your property, the listing prices of other properties may not measure up to your asking price, since they cost less, this means that you will ultimately have to drop the price or take it off the market!

2: Through Interest Expenses

This is especially for the case of people who don’t buy the property with upfront payment from themselves, because unfortunately, the average person may not afford a house all on their own minus making use of a mortgage. Your house may also lose you money through interest expenses.

In other words, your interest expense will relate to the cost of borrowing money.

3: Through Upkeep

Your house needs to be maintained, especially if you desire to sell it off later in life. With maintenance comes money spent, which equates to money lost. Granted there are also scenarios where in the long-run, the money you spend on maintaining your house will pay off at bigger rates.

Every year, you will need to shell out money that will go towards maintaining and repairing your house. With this being the case, you might want to think real hard before purchasing that really expensive property, because its upkeep may end up costing you an arm and a leg.

In your calculations, you might come to realize your maintenance and repair budget equals a heart-stopping percentage of your principal and interest payment.

On the flip side, for a house that is purchased for investment purposes, it is assumed that it will grow in value over time. This may not be the actual case if you consider that in America, home values go up to approximately 4% on any given year.

4: Through Energy Leak

As described in a previous post is energy leaking through your window, leaks and tears are responsible for heat leak during winter and higher AC bills during summer months. More the rooms and more the windows are in your home, there more chance of energy leaking.

Now if you factor in inflation which will mean an increase in maintenance costs that always equates to 1% of the home’s value, then technically, your house only gains 3% per year.

There are other ways you may lose money being a home owner. These are just a few. Readers what other expenses you may incur due to your negligence or otherwise?

LIKE THIS POST?
I agree to have my personal information transfered to MailChimp ( more information )
Join our community of 8000+ subscribers to increase your net worth and build wealth
We hate spam. Your email address will not be sold or shared with anyone else.

Share this:

  • Tweet
  • Email
The tool that changed the way I manage my personal finance - Personal Capital, The Best Free Personal Finance Tool

Want to start a WordPress blog now? The onecentatatime.com blog is hosted by Siteground Web Hosting. For only $3.95 a month, Siteground can help you set up and host your website/blog quickly and easily.

About the Blogger Hi I am SB, a personal finance enthusiast with a career in software development. I am an immigrant to the USA since 2005, after being born and brought up in India. This 40 something technocrat lives and breathes personal finance whenever he gets time from the day job, job as a husband and a dad

Some links on this page may be affiliate links, if you make a purchase following the links, I may earn a commission. Read affiliate disclosure here
« Reasons Why I’ll Not Leave My Fortunes to My Kids
Becoming a Successful Freelancer »

Comments

  1. dojo says

    November 4, 2013 at 8:28 AM

    So true. A house does cost you money, that’s clear. Taxes, maintenance, repairs, energy issues and everything in between. In our case the taxes are pretty small (we just pay a city tax, no community taxes or fees), but the other costs to add up.

    Reply
  2. Sarah says

    November 4, 2013 at 11:08 AM

    It’s definitely important to consider ALL expenses (not just the mortgage) when buying a house. If you can’t afford all of the miscellaneous expenses associated with your house, you can’t really afford the house.

    That said, most of these expenses are also included in monthly rent payments, so I have a hard time calling them “losses.” Especially since property taxes pay for all of your local services (street maintenance, snow plowing, leaf pick-up, etc.) and public schools.

    Reply
  3. midlifefinance says

    November 4, 2013 at 12:24 PM

    Yeap, we just got our property tax bills. It’s no fun paying those big bills before the holidays.

    Reply
    • Kostas @ Finance Zone says

      November 6, 2013 at 10:59 AM

      Don’t you just love the timing of property taxes? Those and unexpected major home repairs are always fun when owning a house.

      Reply
  4. [email protected] says

    November 4, 2013 at 1:24 PM

    Great info!Energy is an important one especially with old houses. It would benefit most home owners to have an energy auditor I think that’s what theyre called, to come out and check their house out.

    Reply
  5. Bryce @ Save and Conquer says

    November 4, 2013 at 4:54 PM

    Some obvious ways to save money on home maintenance is to do as much as you can yourself. One seemingly big maintenance chore that may only come up every ten years or so is house paint. Painting a house may seem difficult, but it is actually quite easy and can be done in a few days. You will save thousands over hiring professional painters if you do it yourself.

    Reply
  6. Betsy @ ConsumerFu.com says

    November 4, 2013 at 9:36 PM

    We do most of our own upkeep unless it involves the roof or the HVAC system. I also stay away from all but the most minor electrical and plumbing repairs. The rental on a house this size would cost far more than I pay in mortgage and property taxes combined, so it is hard to make an apples to apples comparison.

    Reply
  7. Beat The 9 to 5 says

    November 5, 2013 at 10:53 AM

    True! Buying and maintaining a house really cost money, but so is renting a place. Though, it definitely cost less to rent than to buy a house, but at the end of your stay, you will have nothing to show for the money you spent doing so.

    Reply
  8. Jack @ Enwealthen says

    November 5, 2013 at 1:13 PM

    Property tax is always a killer. It always goes up every year as the city, county and state take their bite of your hard earned money. Plus, you’re at the mercy of the assessor’s office hitting you with a reassessment when the tax coffers are getting low.

    This is why I always plan for paying 1.5x the property tax when buying a property. It’s an excessive allowance, but it avoids problems when the unexpected happens.

    Reply
  9. Buy & Hold Blog says

    November 6, 2013 at 10:06 AM

    SB,

    This is a very timely post. I posted an article “The True Cost of Homeownership” detailing costs I’m incurring on our decently priced/sized/middle-of-the-road house in the Atlanta area

    Reply
  10. Benito says

    January 4, 2014 at 10:21 AM

    Many people choose the option of the custom made cabinets
    that can be a little expensive than you can imagine as everything is to be made according to your choice.

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.



Create your own blog in 20 minutes and $20

Personal Capital, a free tool to change your financial health today

I use and suggest Upstart, for your personal loan need

CreditKarma, a free tool to check your credit scorey

I use Coinbase, for my crypto investments

101 Cents at a Time

101 Ways to Earn Extra Money on the Side
201 Frugal and Perfect Birthday Gifts
101 Ways to Save Money Everyday
101 Ways to be Better and Successful at Work
101 Ways to Save Environment and Energy
101 Frugal and Romantic Anniversary Ideas
101 Low-Cost Men's Fashion Ideas
101 Personal Finance Tips
101 Ways to Reuse Household Stuff
101 Things to Do, When Nothing to Do
101 College Graduation Gift Ideas
100 Tips for Ecommerce Startup
101 Ways to Enjoy Indoor During Winter
101 Ways to Beat Procrastination

Popular Posts

Quick Cash - How to make $100 legally, in a day
Living well on less than $15,000 a Year
Top survey sites for side income
What to do when auto repair goes wrong
Where should I invest my money now?
20 Ways to be productive and happy at work
51 Ways to get out of debt
Be a better person in 15 days, 15 ways
Income ideas for retirees and senior citizens
51 side jobs for college students
Urgently need a large amount of money?
Should I buy or should I rent?
Best Personal loan providers
25 Ways to save environment
25 DIY car repairs to save money
How to decorate office cubicle
How to show your wife you care
50 Financial Rules for Success
51 Frugal weekend family activity ideas
Become Rich By Saving 1 Hour Of Daily Wage
How much do I need to save for retirement?
How to negotiate your salary

Follow us on FaceBook

About Author

SB

Blogger by choice and IT manager by profession. Finance is my passion and gardening is my greatest satisfaction. Born in India, settled in US, Husband and a father. I created this blog in 2011 with a vision to help others. Thanks for your patronage. More info on my "about" page.

View all posts


Subscribe

Join our community of 5000+ subscribers to increase net worth and build wealth

Advertisements

Personal Stories

How I got a new HP computer replaced
Was COVID circulating in USA in fall of 2019?
How my credit score went up 800+
Why I didn’t invest in Bitcoins
How I controlled impulses to buy things
Why this blog is named One Cent at a Time

Subscribe via Email

Site Disclaimer

Disclosure of Material Connection: Some of the links in this web site are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”
Read full Affiliate disclosure


One Cent at a Time is published by SB. The opinions expressed herein by him are his own and not those of his employer or anyone else. All content on One Cent at a Time is for entertainment purposes only. By reading this blog, you agree that SB and/or One Cent at a Time is not responsible for any actions taken after reading this blog. For the full disclaimer, click here .

Major Media Mention

One Cent at a Time Media Appearances

Copyright © 2023 One Cent At A Time · Designed by Nuts and Bolts Media