What it takes to be a Homeowner

In order to enjoy having your own house, you have to finally decide to stop renting. But once you do so, you have to be aware that there is more money involved in investment in real estate; although this time they will not go to monthly rentals but to payment of house mortgage instead. It may also surprise you to suddenly realize that there are things you have to be responsible for this time that you are no longer renting a property. This time, you have to be conscious of paying property taxes, maintenance, repairs, utilities, and insurance.

When you were just a tenant, you would simply expect the landlord or property owner to fix things that would need repair and you can’t have a hand in making major improvements in the house unless it has due approval. This is no longer the case when you make your own investment in real estate. You will have a free hand in decorating and personalizing your own home. And you will also own up to all the requirements and responsibilities of being a home owner. When assessment of special taxes occurs and you are requested to produce certain requirements, you have to comply. Here are some of the important things you need to be aware of once you decide to purchase a real estate property.

Closing costs

Closing costs can be assumed by the property seller. However you, as the buyer, can have your share in the closing costs depending on your agreement with the seller. This can be stipulated in the purchase offer and can be negotiated.

Property Taxes

Your investment in real estate will ultimately result to payment of regular property taxes. State municipalities and counties derive most of their revenues from property tax payments. Depending on your type of property and location, property tax amounts would vary. It’s best to be aware of this annual obligation and allocate a budget for this one. Non-payment can easily result to more penalties and interest charges; so take note not only of the amount due but of the due date as well.

Private Mortgage Insurance

Home lenders would need assurance that they will get paid so they will require you to secure a PMI or Private Mortgage Insurance especially if you were able to acquire a house with less than 20 percent down payment. In the event that you reach enough equity on the property, this insurance coverage can be canceled any time.

Homeowners Insurance

Homeowners’ Insurance is a requirement when you want to secure a loan. However, since this type of insurance does not aptly cover everything, you need to establish what other forms of supplemental coverage you would need depending on the location and condition of your house. Your investment in real estate should be adequately covered by insurance so if you happen to be located in an area that’s prone to occurrence of natural disasters such as floods, hurricanes and tornadoes, you need to inquire about policies that will cover such types of natural disasters. The same thing if you have the habit of storing valuable items in your house. Expensive equipment, important documents, jewelries, and other personal items can be insured by purchasing additional insurance riders. Ask your insurance agent about this.

Regular home repairs and maintenance

Regardless of whether you bought a brand new house or some unit that has a previous owner, sooner or later you’ll find that there are parts here and there that would need simple fixing or major repairs. You need to be ready for these types of expenses as there will no longer be landlords or property managers who will take care of these things for you. Everything has to come from your own pocket. In order to minimize having to spend for expensive repairs, make it a habit to conduct regular maintenance and inspection of your property. Prevention, after all, is still the best cure. And, moving forward, you would need to maintain your property in good condition all the time so that when the time comes that you decide to sell it, you can also command a higher price for it. Make your investment in real estate worthwhile by taking care of it the best way you know how.