Monday, October 16, 2017

10 Lessons I Learned During My First Year as a Homeowner

Ahh.. that word "homeowner" just has a permanent and secure feel to it. It means you've settled down somewhere rather fixed, at least for a time. Renting can sound so temporary; like a blip in time that can move and change at a moment's notice. Once you've signed those final closing documents, it's quite a feat to turn around and sell again. It's usually not something you plan on doing, unlike renting. Sure, you can sign a lease, but you can also just pack up and walk away. Not so easy when you actually own a home.

It's hard to completely describe what it's like to own a home until you've been there, but preparing yourself or learning from others is a valuable attitude. My father always said, "you can't make all the mistakes in the world, you have to learn by other people". I've taken that to heart and constantly learn from other people so I can make better decisions and choices in my own life. Here's what other's have said when it comes to homeownership (and maybe a few insights from me).

#1. Monthly expenses are more than a mortgage.

Not only do you have the principle and interest charges each month, but taxes and insurance. These can add anywhere from $100 - $500 or more to the monthly costs. A lender should discuss all this with you because you can pay for taxes and insurance with your monthly mortgage payment or you can pay it all at once. Most of the time, it's easier to add it all together so you have one payment per month. But that may not be all either. You should save money for expenses that come along and for any emergencies.

"We were a little shocked when what we thought we would be paying each month ended up being $300 more! But I'm glad our lender explained everything before we signed AND that we asked!" - Leonard W. Sunny Isles Beach

Read More: 3 Ways to Manage Debt AND Buy a House

#2. You have to fix everything.

No more calling your landlord for replacements or repairs. There's no one to call but you - or a handyman YOU have to pay for. If you're hand yourself, it might not be an issue. If you can repair most things on your own then you can save yourself a ton of money. But if something breaks like a water heater, furnace, or major appliance, it's all on you. This is where a lot of homeowners get bogged down in debt, replacing appliances or having major repair issues and if they have no reserves, it can add up quick.

Related: Should you buy a fixer-upper?

#3. Home may not come with everything you need.

"We were shocked to find out our house didn't come with a refrigerator or washer and dryer. These were added expenses we weren't planning on. Our agent was very new to the business (another issue) and didn't tell us these items were not included in the purchase. Our wallets took a big hit right off the bat."  Mary T. Destin Florida

Make sure you know what comes with the house and what doesn't. If it doesn't come with something, ask about it. You never know what the seller will let you have unless you ask.

More: What if you buy a home with a pool ... and you haven't got a clue?

#4. Don't buy new.

"We were so excited about a new house that we thought everything in it needed to be new too. We maxed out credit cards and lines of credit just to get new appliances like a washer and dryer, refrigerator, and range. Not the way we wanted to start our experience." - Erika R. St. George Utah

There are a lot of places to get great used appliances that have been refurbished. Check online or with other people in your community. Start with the appliances you need and then upgrade as you can.

#5. The yard was a lot of work.

"The backyard is what sold us. We loved the landscape so much that we really didn't mind the little quirks inside the house. But then it suddenly was ours to maintain. We didn't realize how much work it was! We had to buy a lawn mower, trimmer, saw, etc... it was so expensive just to get the materials needed to maintain the yard we so greatly loved. Then there was the time. I just didn't realize how much time it took to keep a yard looking beautiful. I wish I had a reality check before buying a house with an extensive landscape."  T. Taylor - Texas Hill Country

Read More: What if you have buyer's remorse after a purchase?

#6. Get to know your neighbors.

"We didn't really get to know our neighbors because we drove into our garage every evening and went inside and really didn't go out front. Then one day I saw a few of our neighbors talking in the street and wondered what was going on. I decided to be brave and ask them what was going on. They introduced themselves and said that one neighbor saw some suspicious activity around another neighbors house last night and called them to let them know. I was so surprised to realize that these people really looked out for each other. I also didn't realize the value in having a great support structure in a neighborhood until that day. We talked more after that and all became good friends. I love the support and the security knowing we all have each other's back."  A.D.W. - PCBeach

Don't be shy. Sure, some people are just born to be cranky but there are others in your neighborhood that could really benefit from your friendship and support. You never know unless you make a move. Not all neighbors will just come up to your doorstep with a basket of muffins. Sometimes you have to make the first move. But when everyone is looking out for each other and each other's property, those neighbors can be much more beneficial than for a cup of sugar now and again.

Read More: How to find a great neighborhood with great schools

#7. I have way too much stuff.

Do you really want to move with all that stuff? "We realized we had too much stuff when we got to our new place and while unpacking I found a bag of garbage our movers had packed in a box.... a bag of garbage. We realized right then we had to get rid of stuff." Nikki M. San Diego

Don't move with garbage. Don't move with stuff you never plan on using or wearing. Don't say you'll get rid of it when you get to the new house because that's just more stuff you have to pack, move and unpack. Do it before you move. You'll be so thankful when you start unpacking. You won't hear yourself say, "Why in the world did we pack that?"

#8. Do the floors first.

"We moved everything in, got all settled, then decided to redo the floors. Ugh.....Why didn't we do this before we moved all our furniture in? What a pain and hassle that could have been easily avoided." - Peter W. (Westbrook REI)

Before moving anything in the house, decide if you need to paint or redo floors. It will save you so much time.

#9.  You have to spend money on things no one will ever see.

It's kind of like buying tires for your care; necessary, expensive, and no one really knows. Maybe all the windows have lost their seal and now you have to spend $10,000 for new windows. Maybe there was a leak under the house; $5,000 later it's fixed. Nothing to show for it but the satisfaction of knowing you won't be wasting water and your family won't get sick on black mold.

Read More: Is homeownership counseling worth it?

#10. You can do pretty much whatever you want.

This is a fun realization. If you've been bending to the whims and rules of a landlord for years, finally owning your own home is freeing and exhilarating, in spite of all the other responsibilities that come along with it. Sure, if you live in a homeowner's association there are bylaws you have to follow and you can't break the law, of course, but essentially, you can do whatever you want. Hammer a nail into the wall to hang a picture; paint the inside (and maybe the outside) any color you want, tear down a wall (as long as it's not loadbearing) and open a room, remodel the bathroom or kitchen. It's all up to you and no one will tell you that you can't - within reason, of course.

Read More: A simple and concise guide to buying a home

There is something so satisfying about sitting in your own living room or on the porch, drinking your coffee knowing you own this investment. You get to use the investment while it's making money for you. You have an asset now that will build wealth for you and that you can tap into if you need to make an improvement in the future. You are building a foundation for wealth and adding to your net worth. 

More than anything, you are realizing the American Dream. Yes, it's still out there and very obtainable. Once you have achieved this, there is a deep satisfaction that comes with being a homeowner.

More Resources:

What actually happens at closing?

Scared to Sell because you have to Buy in this Market?