Hidden Costs of Homeownership Are Skyrocketing

[abs]

Our insurance rates are killing us. They keep doubling every year it seems. We’ve had a ton of natural disasters in recent years so I get it but these increases aren’t sustainable. We are another where our taxes and insurance are more than our mortgage payment.

I also agree maintenance costs are sky high. This year alone we’ve had to replace garage door parts, get some minor plumbing work done, and replace a breaker. All of that cost thousands of dollars which even a few years ago would have been half the cost.

[Jalapeñomel]

Apr 12, 2024 12:56:25 GMT -5 sakoro said:

I bought a 1990 condo two years ago and it’s been a lot more expensive than I expected.
- HOA has gone up $180/ mo due to deferred maintenance. There’s a new law in CA that required inspection on balconies and staircases and our complex has to make repairs. Also, pools have to be resurfaced and the clubhouse needs repairs. Finally they are doing termite treatment in the attics and car ports.
- Because our local electric utility charges the highest rates in the country (SDG&E), I replaced my windows and added ceiling fans to retain cool air in summer. All told, that cost around $10K.
- Appliances fall apart much faster than in the 80s/90s. I have replaced the washer/ dryer and I think the 17 year old fridge is on its last legs. I also need to replace the furnace at some point.
- Taxes and insurance have stayed the same (so far). My homeowners insurance company (State Farm) is no longer taking new customers in CA, but they haven’t kicked me off the rolls. We have a lot of extra local taxes for parks, water treatment facilities and schools.

None of these are the type of repairs you can show off to your friends on social media, just boring stuff that needs to get done.

My HOA has gone up $250 since we purchased in 2021. It makes me so 😡

[plutosmoon]

I think actual homeownership in term of maintenance has always been pretty expensive and hard for the average homeowner to keep up with. In my lower income community most houses I looked at were essentially untouched since the 1950s when they were built. Some didn't look like the walls had ever been painted, wiring was still fuse or even knob and tube, asbestos still wrapped the pipes, some had original appliances and 40+ year old furnaces. Stuff was held together with DIY repairs. The stability of homepownership to me was more about not being at the mercy of a landlord. My mom has always said not to expect to ever come out ahead on a house when you sell, but you have to live somewhere, so it's ok to rent because either way you probably won't see that money back.

I re-bought this past August after a 2 year rental stint, my landlord wanted to raise the rent almost 15% right before I gave notice, probably due to rising taxes and maintenance costs, I believe they ended up re-renting 20% higher than what I was paying, renters aren't immune to these cost increases since landlords pass the increases along. You can't win either way. My taxes are a bit less than $3000 a year and my current HOI is $800, but my house is assessed under $200,000 and my insurance notified me of non renewal due to the roof. The roof is probably about 15 years old, our parents and grandparents weren't faced with replacing perfectly good roofs in order to maintain insurance. My grandparents roof actively leaked it was 30 years old when they sold having never replaced or so much as repaired it.

In my homeowner journey, I've learned to do a lot of repairs myself, I simply can't afford to outsource. Some repairs are less than ideal, I just fixed my leaky tub faucet with a new washer, but it's still not quite right. I spent almost $100 on parts and specialized tools just to replace a damn washer, it's no wonder plumbers charge $300 just to walk in the door. I need to replace some 2 prong outlets, which I could DIY cheaply by just putting in an ungrounded 3 prong, but the safer DIY way is a GFCI with the best way having an electrician come in and ground them. I need to do something soon, since I need somewhere to plug in the window a/c upstairs.

My city has been raising taxes, so the taxes I am paying are about double what they were 10 years ago. My city barely keep the lights on even with these increases, we have a serious budget shortfall (several million), we lost a bunch of federal and state funding and are laying off 30 city employees to meet the budget shortfall. Without help from our state or feds, or city has no choice but to raise property taxes to help with the shortfall.

[mrsukyankee]

We are lucky we don't have a mortgage and that our "property" taxes are very reasonable compared to the US (we call them council tax). I think we pay around £4,000 (maybe a bit more or less, I can't remember). For a house our size and cost, it's not a lot. And we're paying either the top or next to top of the tax bands in our area.

What is a struggle in London for most people is that rent and purchasing prices keep going up insanely. My friend's rent went from £1800/mo to £2300/mo this year. A house, very similar to ours, went for £350,000 more than ours did 4 years ago. It's nuts.

We're also seeing materials and labour being at a higher cost. Some of that is Brexit and some of that is just what's happening around the world.

[sakoro]

Apr 14, 2024 9:30:41 GMT -5 Jalapeñomel said:

Apr 12, 2024 12:56:25 GMT -5 sakoro said:

I bought a 1990 condo two years ago and it’s been a lot more expensive than I expected.
- HOA has gone up $180/ mo due to deferred maintenance. There’s a new law in CA that required inspection on balconies and staircases and our complex has to make repairs. Also, pools have to be resurfaced and the clubhouse needs repairs. Finally they are doing termite treatment in the attics and car ports.

My HOA has gone up $250 since we purchased in 2021. It makes me so 😡

Not sure what your circumstances are Jalapeñomel, but I’m actually glad they put our HOA fee up and are doing the maintenance. There are other communities where the board resists and resists higher fees and then the community either 1) falls into disrepair or 2) has to do an emergency assessment for a big amount or 3) lets the reserve get so low that banks won’t approve mortgage loans.

Sigh, I wish the board would consider simpler landscaping with native plants in order to use less water (we are in Southern California, a coastal desert). Also there are two swimming pools for 480 units and neither seem to get much use outside of summer. They could close one for the off-season and save on chemicals and maintenance.

When I was looking at condo and receiving financial disclosures, I wished there were more resources for the lay person to understand HOA documents and finance. I could only afford a condo, so I didn’t have a choice about buying into an HOA. But it’s hard to know what is normal HOA dysfunction and what is a red flag.