No Emergency Budget
Making the shift from renting to owning can be an exciting way to build long term wealth, but it also carries certain financial burdens of its own. In addition to a mortgage, taxes and insurance, homeowners also need to set aside money for repairs and maintenance. Often called ‘carrying cost’, these ongoing expenses are simply part of home ownership. You can build these funds gradually, but if your home’s purchase price leaves you with nothing in the bank, you’ll be in trouble if an emergency occurs during your first months of ownership.
Avoid this issue by keeping an emergency fund (many experts suggest between $2,000 and $3,000). Another approach is to invest in a home warranty. And of course, DIYers can keep an emergency home toolkit ready to go.
Weekend Warrior Residue
Just because you are a smart DIYer who does your research (at sites like Family Handyman), that doesn’t mean that everyone is as responsible. Some poorly planned home repairs are simply band-aids, and while they need to be addressed, they aren’t anything to worry about immediately. Others, however, are time bombs waiting to go off on the unwary new homeowner!
Avoid this problem by pushing your home inspector to look closely at any home you’re considering for purchase, and by not ignoring any signs of sub-par craftsmanship. This Family Handyman article demonstrates some of the shockingly poor maintenance nightmares you might encounter.
Mountains from Mole Hills
A house is a major purchase, and any residential building is filled with hundreds of spots where something might have less than perfect finish. Sooner or later, you’re going to find an issue that has slipped past you, your Realtor and your home inspector. If your first reaction is to panic, don’t worry: that’s a perfectly natural reaction. But take a deep breath, step back and really examine the issue. Is the issue as serious as the DIY nightmares discussed earlier? Or is it as minor as a stuck deadbolt? It’s understandable (and maybe unavoidable) to be worried about your new home, and most homeowners will have an “oh, no!” moment or two after moving in. The trick is to have a reaction that’s in proportion to the problem. (And in the meantime, here’s how to fix that stuck deadbolt!)