When you’re shopping for a home it’s hard to understand at first that the price tag on the house isn’t what it’s all about. It’s only part of the equation.
Start a spread sheet so you can analyze what a home will cost you, beyond the price sticker. What this simple diagram doesn’t consider are renovations and other monthly costs like home insurance, internet, cable, water/sewer service plus start up costs like moving, appliances, yard maintenance items and furniture.
If you buy a home in town you’ll possibly encounter deed transfer tax., hence the high closing costs in the example above. On the plus side the wear and tear on your car will go down substantially as will money spent on gas. Add a column on your sheet for mileage and do the math; it matters.
If you buy a home outside of town though close by you’ll enjoy lower taxes, septic service and nearby schools. You’ll still have to deal with more gas spent, possibly a middle aged home and a well.
Generally speaking rural homes are older. You may be dealing with a house lacking in insulation therefore your heating costs are higher even though you have a woodstove. Taxes are low however you have a well and septic system that could be a substantial cost down the road.
This article is aimed at first time buyers. No one wants to be house poor. Please do your math before you get in over your head.