Most people buying a home focus on the obvious costs—the down payment, the loan, and the monthly mortgage. But what often doesn’t get enough attention are all the other expenses that come with owning and keeping a home in good shape.
Whether it’s your first home or your fifth, these “hidden” costs can add up quickly if you’re not budgeting for them from the start. Here’s a breakdown of what to expect and how to plan for it so you’re not blindsided.
1. Property Taxes: They Don’t Stay Still
Even if you’re paying them through your mortgage with impounds, property taxes aren’t fixed. California Prop 13 allows for a 2% increase in the property tax annually. If you make a capital improvement to the property, that portion of the property can be assessed at today’s higher value.
What to do: Keep a buffer in your monthly budget, and set aside funds in an interest-bearing account.
2. Insurance (And the Gaps You Didn’t See Coming)
Basic homeowners insurance is just that—basic. If you’re in an area prone to wildfires, earthquakes, or floods, expect to pay extra for coverage you may actually need. The escalation in insurance cost has been a major issue in California, and many other states. Lenders require it to cover their security for the mortgage. Lenders will generally require insurance from an “Admitted” company. That means you may not be able to go with the cheapest company.
Tip: Review your policy at least once a year. Know what’s covered, what isn’t, and how much your deductible actually is in a real emergency.
3. Maintenance and Repairs: The Stuff You Don’t Think About Until It Breaks
Roofs wear out. Water heaters go bad. A/C systems fail—in July. Every home has a shelf life on its systems, and routine maintenance is just part of ownership. Pools need to be replastered every 10 years or so.
Rule of thumb: Budget 1–3% of your home’s value per year for upkeep. A $750,000 house? That’s $7,500–$22,500 over 12 months. And no, that’s not just for old houses.
4. HOA Fees and Special Assessments
If you’re in an HOA, you’ve got monthly dues. But that’s just the start—some associations hit you with special assessments when something major comes up, like a roof replacement or plumbing overhaul for the whole building. Insurance costs have escalated; associations have to pass that on to owners. If reserves run low or are used, they have to be refilled by higher dues or assessments.
Advice: Always read the HOA budget and reserves before you buy. A low monthly fee might just mean they’re underfunded—and you’ll pay for it later.
5. Utilities and Services: Not Just “The Bills”
If you’re coming from an apartment or smaller home, expect utilities to go up. Trash, sewer, gas, electric, internet—everything’s on your tab now. If a pool is applicable, pool maintenance, water and electric cost
What to do: Ask the seller or agent for a 12-month utility average. It’ll help you budget realistically.
6. Yard, Bugs, Gutters… All the Little Things
Tree trimming, sprinkler repairs, pest control, seasonal gutter cleaning—most of it isn’t glamorous, but it needs to get done. And it costs money or time—or both.
Tip: Spread this stuff out across the year and plan ahead. A $300 pest control bill feels a lot smaller when it’s expected.
7. Big-Ticket Replacements
Furnaces, roofs, windows, plumbing—they all have life spans. If you’re buying a home and the inspection says the roof is “near the end of its useful life,” assume you’ll be replacing it soon. Be aware if you have solar panels and have to replace the roof, removing and reinstalling the panels is costly.
What to do: Start a home emergency fund. Avoid using credit cards for this kind of stuff—it adds financial stress to physical stress.
Bottom Line
Owning a home builds long-term wealth. But you need to go into it with eyes wide open. The more you understand what it really costs to own—not just to buy—the better prepared you’ll be.
If you’re looking at a home, refinancing, or just want a gut check on how the numbers work long-term, let’s talk. I’ve walked plenty of people through it, and I’d rather you be over-prepared than caught off guard.
If you are in the Los Angeles area, and have any questions or real estate sales or financing needs, feel free to contact me
Ron Henderson GRI, SRES, SFR, RECS, CIAS, CREN, GREEN
President/Broker
Multi Real Estate Services, Inc.
Gov’t Affairs Chair – Southland Regional Association of Realtors (2025)
Gov’t Affairs Chair – California Association of Mortgage Professionals (2017-2018)
Chairman – OutWest Marketing Meeting (Real Estate Education)
BRE #00905793 NMLS #310358
www.mres.com
ronh@mres.com
Specialist in the Art of Real Estate Sales and Finance
Real Estate market, mortgage rates, Los Angeles, San Fernando Valley, Conejo Valley, Simi Valley, Woodland Hills, West Hills, Calabasas, Chatsworth
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