As a millennial, you may have heard all your life that investing in a home is a sound financial decision. However, buying a home is not as simple as signing a contract and paying your monthly mortgage. Whether you’re looking at houses for sale in Lockwood South or apartments in Melbourne CBD, there are hidden costs of homeownership that you need to factor into your budget before locking yourself into a long-term commitment.

In this guide, we’ll dive into the most common expenses you’ll face as a homeowner.

Property Taxes

Property taxes are one of the most significant recurring expenses you’ll have as a homeowner. They are assessed based on the value of your property, and they vary depending on where you live. Property taxes can cost you thousands of dollars every year, and they tend to increase as your property value appreciates. Before buying a house, research the property taxes in the area and factor them into your budget.


Homeowners’ insurance is another essential expense that you need to include in your budget. Homeowners’ insurance protects you from losses caused by damages to your property or personal liability claims. Depending on where you live, homeowners’ insurance can cost you anywhere from a few hundred to several thousand dollars every year. The good news is that you can shop around for this to get the best value for your money.

Home Repairs & Maintenance

When you own a home, you’re responsible for all the upkeep and maintenance – this can range from minor repairs and cleaning to major renovations and replacements. For example, you may need to paint the house every few years, replace the roof or windows, or fix a leaky pipe. Maintenance costs can vary widely depending on the age, size, and location of your property. A good rule of thumb is to set aside about 1% to 3% of your property’s value each year for maintenance and repairs.


Utilities, such as electricity, gas, water, and trash, are another ongoing cost that you’ll have as a homeowner. Depending on where you live and your usage, you may pay hundreds of dollars every month for utilities alone. Some communities may also require you to pay for sewer or stormwater fees. Before buying a house, research the average utility costs in the area and factor them into your budget.

Closing Costs

Closing costs are the fees and expenses you’ll need to pay when you finalise the purchase of a property. Closing costs can include appraisal fees, title search fees, loan origination fees, attorney fees, and more. Closing costs can add up to 2% to 5% of the purchase price of the property. Be sure to ask your real estate agent or lender for an estimate of the closing costs and include them in your budget.

Buying a home is a significant investment, which is why it’s essential to budget for the hidden costs of homeownership before taking the plunge

Property taxes, insurance, maintenance, utilities, and closing costs are just a few of the expenses you’ll need to plan and prepare for. Remember, every property is different, and costs can vary widely, so it’s crucial to do your research and consult with professionals before making a decision. Good luck!