"Total cost of ownership" factors important in home buyer decisions

Published 19 November 12 07:22 AM | Gord McCormick 

Ottawa Home Buyer Tips: 

"Total cost of ownership" factors are important and often overlooked

Buying is always an exciting process but unfortunately buyers may overlook
some important ownership cost considerations in their enthusiasm.  Most buyers do their planning and
a budget for their purchase price parameters and head out hot on the trail of a
new property.  Many times the purchase price, features of the house and the mortgage payments are the main factor
guiding their home search.  There are many things to be considered in the total cost of ownership (TCO) and buyers will
want to carefully consider and plan for these.  These factors include:

Closing costs:  most properties will have total cash closing costs required of 2-2.5% of purchase
price which includes legal fees, land transfer taxes etc.
Costs for any immediate work or updates that will need doing
upon moving in to the property.
New construction homes entail a whole range of additional
costs for upgrades, air conditioning, eavestroughing, landscaping, fencing and
Country properties have many of their own specific and
unique cost considerations.
Miscellaneous costs such as new window coverings,
appliances, furniture, or other accessories or equipment the new property
Annual property taxes are an important consideration and
also what the likely impact may be of future tax increases.
Utility costs are also to be considered and factored in
along with monthly payments for mortgage and taxes.  These should include:  heat, hydro, water, telephone and
internet.  As a guideline use 1% of purchase price annually and this will be roughly the equivalent of the annual
property taxes.  So if property taxes are $3,000 annually-one will probably spend about $250 monthly for utility costs.

Condo fees or any special assessments.
Any monthly rental costs or maintenance contracts. I.e. Lawn
care, snow removal, alarm systems, hot water tank, cleaning services.
Miscellaneous ongoing maintenance and updates or capital
improvements i.e. new furnace, roof shingles, windows, fence or deck
replacement etc.  We use a "rule of
thumb" of 1% of purchase price annually and more if a property has been on a
deferred maintenance plan by the previous owner. 

Does the new property or location require additional
investment in transit?  More gas and auto
operating costs? A second vehicle? Daycare or recreational expenses?

If you are planning a purchase and would like some
assistance to ensure your budget incorporates complete Total Cost
of Ownership factors, feel free to give us a call.  Ask about our buyer rebate plan
and flexible buyer representation programs. (not intended to solicit those with
existing representation agreements)

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage


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