Lessons learned in the first years of buying a home

Almost everyone in the Mana team has purchased a house in the last few years and we’ve learned so many lessons that come with home ownership. This week, Jordan is writing about her experience and has some great advice to share. While the first few steps to home purchase are the buying process itself, there are so many more things to think about and know about when owning a home...many of which come with a cost. A recent survey showed that 78% of homeowners regretted their decision to buy a house. The top reasons given were unexpected expenses, unexpected issues, and too much work.  Buying a house is very different from renting or owning a condo or apartment. Some of our clients are taking the leap to buy their first (or next) home. Before you commit, read this post!  

I don’t own the right stuff!

One of the first things you’ll realize after purchasing a home is that you don’t really own anything. I thought I was in pretty good shape. I had enough furniture to (roughly) fill a house. My partner and I lived on our own for several years, so I already had all the things you’d expect to need, from small kitchen appliances to full bathroom sets.

You know what I didn’t own? A ladder. Or a hose. Or a paintbrush. Or a lawn mower. Or a rake. Or a fire extinguisher. 

You’re going to need all that stuff, and more, when you buy a home. Especially if you are occupying the property (as opposed to renting it, where a property management company or Superintendent will likely be able to supplement repair supplies).

The bottom line is that there are going to be things you’ll need to buy immediately, while others can be purchased over time. The immediate needs may not be as fun as the long term wants. Mana’s suggestion: before you spend endless hours at Home Depot, make a list of all the ‘need to have’ items vs the ‘nice to have’ items. Cross reference these lists with your budget for your new home. Ideally, you can space out these costs throughout the year. Although, as we’ll touch on later, you’ll want to always have a house-related ‘emergency fund’ to ensure you cover unexpected necessities.

It takes time for a house to become a home, changes can and will be gradual

The walls, the floor, the light fixtures, the windows, the landscaping, adding crown molding. The list goes on and on and can become overwhelming. Even if you save and allocate a budget to a specific home project, that budget can easily come and go. 

Accepting that change takes time is a learning curve, especially when it comes to the many projects you will want to jump into versus actually having the funds to complete them. If there isn’t an unlimited budget, our recommendation is to write out a list of all the home projects you both need and want. Then, rank and prioritize this list. Next, you’ll want to work with a professional to map out the costs for the projects of highest personal value. We also seriously encourage you to add 30% to every quote, because unfortunately home projects tend to go over budget. 

You can even start these exercises ahead of committing to a home purchase, to get a clearer sense of actual cost of ownership. This can alleviate and mitigate some of the inevitable renovation surprises that all new homeowners seem to encounter.

Don't Skimp on Home Maintenance

While living in a condo or an apartment, most don’t think about all of the maintenance that goes into keeping the building comfortable and functional for its occupants. 

Maintaining a home is both an investment and expenditure. Here are some regular home upkeep costs we’ve learned are important to budget for: 

• Regular home cleaning

• Trimming trees, bushes, and shrubs in addition to regular garden / yard maintenance

• Replacing furnace filters quarterly

• Removing leaves and debris from gutters and downspouts

• Maintaining appliances

• Testing lawn sprinkler systems

• If you have an underground lawn irrigation system, leaks in the pipes or connections can cause your water bills to skyrocket.

• Adjusting sprinkler heads to make sure they are pointing in the right direction, and that they are distributing the appropriate amount of water  to avoid water waste and damage to your home (you may like your neighbors but you don't want to be paying for watering their lawn and you especially don't want to be watering the street).

• Winterizing sprinkler systems can save pipes from freezing if you live in a place that snows.

• Checking gaps and weatherstrips on doors and windows

• Air slipping in/out around doors and windows can cause higher utility bills. If you can see sunlight around the edges of the windows and doors, then know that the air is coming and going as well.

• Bathroom exhaust fans can become clogged with lint, dust, hairspray, and more, hurting efficiency

• Maintaining plumbing

• Cleaning dryer vents

• Lint buildup in the dryer vent will affect the dryer's efficiency and may create a fire hazard. In fact, about 15,500 house fires are caused by clothes dryers each year. 

• Inside and outside paint upkeep

• Deck, patio, and driveway maintenance

In addition to these regular tasks, think about all the “big” stuff that can be an expense. New roof, new driveway, foundation issues, bathroom/ kitchen remodel, burst pipe, water damage, hot water heater, new furnace, etc. The list goes on. Even if you’ve had a stretch with no big expenses, something will likely happen sooner rather than later! We’ve found that most of our clients (including the Mana team members) spend somewhere between 1-3% of the home’s value on annual home upkeep. 

Finally, when it comes to major home improvements, remember to keep thorough records - i.e., keep your receipts and a list of the upgrades. When it comes time to sell your house, these costs will be added to the value of your house, increasing the profit you’ll receive from its sale.

Plan for Increases in Property Taxes and/or Homeowner's Insurance

This is one thing I was not accounting for when we bought our home: the value of a property after home improvements. Property taxes increase every year. Counties/cities can impose these increases, school funding can affect them, and of course, larger scale home improvements are some of the main reasons they go up. Even the larger economic climate can affect property tax. A majority of homeowners saw their property taxes soar in 2021 due to the rise in home valuations.

The minimum balance you need in your escrow account changes every year, mostly due to property tax and home insurance rate increases. When this happens, it can cause you to either pay the shortage or expect an increase in your monthly mortgage payment. 

Learn to evaluate home value based on the things you can't change - location, neighborhood, overall structure/set-up, etc.

Buying a new home is both stressful and exciting. While you are busy looking at potential homes, focusing on the number of bedrooms, getting pre-approved and putting together the best offer, it’s easy to convince yourself that you’ve found the perfect place. But until you have lived there, remember that you likely won’t realize the things that irritate you about it. My partner and I have been reflecting on this, and we now have a list of the things we will keep an eye out for in a future home purchase. 

Here are some of them:

Taking into account which direction the driveway faces. In snowy climates, driveways that face north can become slippery disaster zones after a big storm because they don't get as much sun to melt away the snow and ice. Driveways that face south, on the other hand, get much more exposure to the sun’s rays throughout the day, which is much easier to deal with when you don’t have to worry about shoveling and removing ice everytime it snows. The same thing goes for the aspect of big windows in a house. Do you prioritize evening or morning sunlight? For morning light, east-facing windows are key. For evening light, you’ll want to prioritize west-facing views. Seasonally, if you want more natural light in the winter, south-facing windows are key. 

Location and proximity to through streets is also key. We have a 3 car garage and a large parking pad, but live close to an interstate, and adjacent to a main street. While we love the space it gives us, the trade off is that drivers use our driveway to turn around, leaving oil stains and tire marks everywhere. 

Having trees in your yard can have some fantastic benefits, but as fall is turning into winter and those leaves begin to fall, cleaning them up can be very time consuming, depending on the species and number of trees that you have. Their proximity to your house can also be a concern, especially with increasingly damaging storms in our future. Trees on your property are your responsibility to maintain, and you can be impacted by a neighbor’s wishes or city mandates if they cross onto property beyond yours. 

The last thing we are going to keep an eye out for is the lawn. Having a lawn on a steep hill can mean drainage issues, as well as mowing up the hill in the heat of the summer. For us, the benefit of a big backyard is negated by the amount of work required to maintain it (just personal preference!). This is why avoiding extremely large lawns is something we’ll prioritize in the future. 

To sum everything up here, we think it’s important that our readers remember that homeownership is a marathon, not a sprint - and that’s actually a good thing! The dream of a turnkey property with no issues is unrealistic. While it can be challenging to manage the responsibilities of homeownership, for many it provides a place of stability, comfort, and self-expression, and a house to truly call home. Homeownership can provide stability, offer opportunities to grow the value of an asset, and most importantly, give you a chance to learn things about your own wants and needs. Preparing and reflecting on these needs pre- and post- purchase is critical to manifesting a satisfying future.

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Jordan Johnson is Mana’s Operations Associate. Mana FLD provides comprehensive financial planning and investment management services to help clients grow and protect their wealth throughout life’s journey. Mana FLD specializes in advising ambitious professionals who seek financial knowledge and want to implement creative budgeting, savings, proactive planning and powerful investment strategies. Jordan has her insurance producer license. When she’s not working, Jordan loves spending time with her puppies Murphy and Mia.