Long time renter, first time buyer. What am I forgetting to budget for? When you bought a house, what expenses took you by surprise? How much of a cash and credit reserve should I keep available for the first six months?
To avoid jinxing this potential house deal, let me put it this way: I'm trying to plan for what happens if this house purchase doesn't
fall through in the next two weeks.
Due to a change in how they calculated what I could finance, I'm having to pay more out of pocket than planned and will be cutting my cash reserves down to just over $1000. Beyond that, I'll have my retirement funds (in a Roth IRA) and $18k in unused credit card lines. And that's it.
I can cover the mortgage on my income, but after construction is finished (two months) and I find renters (four months?), the rent will actually cover the mortgage payment, so I'll be able to put all my income to saving an emergency fund. But in these first few months when I'm covering the mortgage and
my current rent, and
getting the lower two units in the house as appealing to renters as possible, I know I'll end up accruing some debt.
So, I am trying to make an extremely solid budget and map out my cashflow for the next six months. I can predict my personal expenses, but I don't think I know all the house-related expenses I'll incur. Can you take a look and see what I'm forgetting?
- Closing costs
- Utility start-up fees (do they charge to come out and turn on water, gas, etc.? do I need to buy garbage bins? do any of these accounts require a deposit?)
- City building permit fees
- Some (second hand) appliances, like a stove and fridge
- New locks for the gates and shed
- A U-Haul rental
- These two Nolo books
- No budget for repairs, and no need to paint the interior, since the mortgage includes a six-digit construction budget (as a scope with a "not to exceed" cost contract) with a 15% contingency for unforeseen problems outside the scope (see my past questions if you want to know how extensive the repair work will be)
- A monthly mortgage payment (PITI)
- Monthly utilities: gas & electric, water & sewer, garbage, phone & internet
- Either lawn costs or the (beer) cost of borrowing a friend's mower
- Some maintenance costs, hopefully minimal or done under the construction warranty in the first few months
Planning to borrow or go without until things stabilize:
- Interior decoration
- Tools and how-to books
- Landscaping costs and lawn tools
- Any furniture that I don't have now
- A housewarming party!
What else? What costs took you by surprise when you bought your first house? I learned a lot from this thread
already. Am I wrong to assume that having just replaced everything in the entire house, I don't need to plan for many repair costs for the first three to six months?
Or, to the extent that I do need to expect some unexpecteds, after listing every planned expense I can think of, how much of a cushion would you be sure to keep on hand for unavoidable things that will just come up, and how much of it would be in cash (vs. credit)? I need to pick a bottom line for myself that I don't touch, as I can see that there are going to be so many expenses will make complete sense, if I could afford them.