Renting to owning, how much do expenses increase?

amother

OP ↓

Fri, May 17 2024, 12:37 am

How much did you see expenses jump monthly when going from renting to owning a home?
A $5000-5500 mortgage seems pretty standard, or even low, depending where you're looking. For a family renting in the $2k range, that's already a $3000 bump monthly.
What other expenses should we consider when figuring out if we can afford the total increase?

Actual numbers or ranges would be really helpful.

For arguments sake, assume groceries and tuition/childcare are the same, and one wouldn't need to add a car.

TIA

amother

Raspberry ↓

Fri, May 17 2024, 12:47 am

Really depends
For us- rent to mortgage only went up about $1000 but we were coming from a tiny apt building appt and went out of town with a cheap rate. So my mortgage is like half of what you posted upthread.

We do pay for heat and water which we didn’t previously and of course with a bigger space we’re paying more electricity.

We also have landscaping fees- though for a while we did lawn mowing and snow shoveling ourselves, it now makes more sense to have someone do it (based on Dh work hours and family circumstances)

Garbage pickup fee

I can share numbers but that’s going to be location specific.

amother

↑ OP ↓

Fri, May 17 2024, 1:03 am

amother Raspberry wrote:

Thanks! I'm trying to figure out all the random things that we didn't think of, so this is very helpful.

amother

↑ OP

Fri, May 17 2024, 1:05 am

amother Slateblue wrote:

I'd assume it depends where
Tax rates etc...

That's true. I'm asking about the NY/NJ area but I know things can differ. What is really more helpful is to hear about the expenses that crop up that you didn't have to consider when renting. Like garbage pickup in some towns, as another poster mentioned.

amother

↑ Raspberry ↓

Fri, May 17 2024, 1:09 am

amother OP wrote:

Thanks! I'm trying to figure out all the random things that we didn't think of, so this is very helpful.

Another expense that’s not a monthly recurring but also not something we paid in the past (which may not be applicable to you though)

Tic pesticide
Exterminator- ants, carpenter bees once a year and 2x a year to replace mice poison (bh we don’t have an issue but previously we found a dead mouse in the garage).

amother

↑ Raspberry

Fri, May 17 2024, 1:12 am

Also, just in general anything that needs fixing is on you. Not just big ticket items like a roof, hot water tank or major appliance. But also general home maintenance to upkeep house like painting and if you have active kids that zetz into a wall and cause cracks it’s not anymore on the landlord to patch it up.

amother

Tealblue

Fri, May 17 2024, 2:13 am

To give some numbers, even though they are obviously location specific:

Garbage $500 annually
Mowing $700 annually
(Don't remember cost of snow removal)
Spraying for bugs was $500 (we don't do every year)
Electricity is about $300 monthly (get budget billing so you're paying the same amount every month)
Heat (natural gas) is about $200 monthly (averaged out over the year)
Water is about $500 annually

We were told to set aside 1%-2% of home cost annually for maintenance and repairs, obviously not all used every year, but that way when there is a big repair you're ready for it.

seeker

Fri, May 17 2024, 2:30 am

amother Raspberry wrote:

If you're smart, you'll put aside money every month for the roof, hot water tank, and major appliances. Because they're going to go, and you don't want it to be a major issue when that happens. Consider it a monthly expense, add it to "how much do your monthly expenses go up with a house" and then hope that everything doesn't break at the same time but even if it does, you'll be better off.

You can estimate in advance things like how long it should be until you need to replace your water tank, and other things with predictable lifespans. That will help you map out a savings number. But then add extra for things like the squirrels finding a way into your roof.

amother

↑ Oxfordblue

Fri, May 17 2024, 3:12 am

amother OP wrote:

add maintenance on top of that + prperty tax increase after annual assessment

shabbatiscoming

Fri, May 17 2024, 4:52 am

After we moved into our built home we were what people call "house poor" for a few months. But after all major expenses from moving and moving into a new home were finished, we were actually better off as our mortgshe was/is less than the rent where we lived before.

stillnewlywed

Fri, May 17 2024, 7:31 am

Utilities increase - fund out from ppl in that area what the average is
Landscaping and property clean up each season
Even just small things like putting down new mulch each season adds up!
Property repairs - new fence, cutting branches etc
Pool maintenance if you have
If you are part of a new community keep in mind shul membership, contributing to the eruv cost etc
House repairs as people said. Have an emergency fund for the big things but even with that you'll have day to day things like appliance repair, replacing anything that breaks such as door knobs, window shades, cabinet hardware, light fixtures etc
Security system if you'll get that
Cleaning help you may need to increase

amother

Stonewash

Fri, May 17 2024, 9:39 am

There are the obvious like property taxes and insurance (which is extremely high in many areas)

Then there are the expenses like utilities which can be surprisingly high especially if you have no experience in a single family home. Water, electric, heating.

Then there are the expenses that people tend to not think about like trash collection.

Also there are services that some people might need like gardening or even cleaning a home that is much larger.

The big area that surprises renters is the cost of maintenance - you pay for everything from a leaky pipe to a roof and everything in between like appliances, electrical. There is maintenance so things don't like shabby like painting. There are chores like cleaning gutters. Even if you do the yard work yourself there are costs of supplies for grass and plants.

There are also discretionary expenses that many homeowners have because they want to upgrade their homes since they own them. If you rent you just deal with the ugly or less than functional. One of the reasons people buy is so that they can "invest' in a space that they like rather than have to deal with a rental they can't change.

I have read that the rule of thumb is that maintenance should be 1% to 4% of your home's value saved every year. Hopefully you will have done an inspection before buying so that there aren't major repairs needed for the first few years.

amother

Apple

Fri, May 17 2024, 9:49 am

When I left my tiny 2 X2 rent stabilized apartment in NY about 10 years ago, I was paying about $1200. I no longer live in NY, but in a larger OOT community. I bought when the rates were good and refinanced during covid to amazing rates. I'm only paying about $250 more a month for mortgage, taxes and insurance on a whole house than I did for just rent in my tiny apartment.

So monthly mortgage vs rent will probably go up with the current rates, but if you are willing to leave the tristate are, not nearly as much as you posted.

In our apartment we did not pay heat or water. Now we do. We did pay electricity in our apartment but way less than in a house. There are also repairs. We have had to replace a roof, had to put in french drains for flooding issues--those were the bigger expenses. But then little things like having the gutters cleaned (unless you can do that yourself) are not expensive, but adds up. Our fridge/freezer just died and we have to replace it. In an apartment that would be the landlord's responsibility.

So yes a house is much more.