Consider the extra costs a bigger home brings
While a larger home is always more appealing the additional costs that they bring need to be factored into your buying decision.
The days when the average person could build a large home on a sprawling stand and fill the home with equally large furniture are long gone. Today, space comes at a premium as evidenced by the humbler, more densely built developments and smaller furniture which is increasingly being brought to market.
If you are considering ‘supersizing’, it’s important to do your homework first and consider carefully whether or not you will be able to afford a large home on an ongoing basis.
Also read: Becoming a property millionaire
The bond
Generally speaking, larger homes cost more which means you will probably have to apply for a large bond. While you may be able to comfortably pay this off now, it’s possible that the interest rate will go up again in the future, which could potentially jeopardise your ability to service your bond going forward.
The garden
Gardens require ongoing attention in the form of watering, weeding, fertiliser and seasonal planting. If the garden is established and you are accustomed to gardening this shouldn’t present too much of a problem other than the fact that it will cost more money to maintain.
A pool
While you may love the idea of a pool, many homeowners who have had one will tell you that pools are a headache. Pools are finicky things which gobble up water and expensive pool chemicals every month. They also require ongoing maintenance in the form of brushing, sweeping, backwashing and occasionally, re-surfacing.
Rates, taxes and levies
Before making an offer to purchase a large home, make absolutely sure you know how much you will have to shell out for these costs. It’s also a good idea to ask whether or not it’s likely the levies will be increased significantly or if a special levy will need to be raised in the near future.
Insurance
Another financial aspect to consider which may not be immediately apparent is higher insurance premiums. The replacement costs of a larger home are higher. Chances are you will acquire more furniture and items which will also cost more to insure, therefore your premiums will increase.
Maintenance
Every home requires ongoing maintenance of some sort. It goes without saying that the bigger the home, the more maintenance will be required. Ongoing maintenance can be costly and needs to be factored in to your budget when considering a large home.
In a nutshell, as is the case with any property purchase, you need to compare the increased expenses of a larger home with what you can realistically afford both now and in the foreseeable future. Doing so will illustrate whether or not you can afford to upgrade or need to live more within your means.
• Information courtesy of Private Property.
