Who does not love to have their own house, that is painted with your favorite color, that has a backyard where you can sit in a hammock and read, and a lock no landlord has access to. It is always an exciting experience switching from being a renter to owing your own house.
However, a lot of first-time homeowners make this mistake of going on a spending spree to decorate or add stuff to their new home, which could potentially jeopardize all the hard work they put in to get the house. Read through these seven steps that will make you make smart decisions once you have that key to your new home.
#1. Don’t Overspend on Redecoration
Having a new home does not only deplete your savings, it also comes with its own monthly expenses like water, trash bills and extra insurance. Therefore, do not go about spending huge amounts of money trying to upgrade the house all at once, this will harm your status as a new homeowner. You can personalize the house gradually or when you can afford to do it all at once.
#2. Do Not Ignore Maintenance
After being a renter for so long you tend to grow the habit of having maintenance and repairs done for you. But that is not the case with owning a home. There is no landlord to reach out for to unclog the toilet or repair a leaking roof, you do everything yourself. Fix problems as they come, do not neglect any repair that could get worse and hence costlier.
#3. Hire Qualified Contractors
As a new homeowner you should always try to save money whenever you can, but that does not mean you should do all the improvements and repairs yourself. You can handle painting the walls yourself, but anything to do with electrical installations should be done by a specialized contractor to avoid harming or even killing yourself.
#4. Get Help with Your Tax Returns
Owning a home greatly changes people’s tax situations and the reductions they are qualified to claim. Do not rule out the idea of hiring an accountant to make sure you do your returns correctly and increase your refund.
#5. Keep Receipts
Receipts are records of the cost of maintaining your house. This comes into handy when you plan to sell your house, your home’s basis soars up, this helps increase your tax-free earnings after the sale.
#6. Do Not Confuse a Repair with an Improvement
Repairs are considered to be part of home ownership and they do not maximize your home’s basis when you want to sell. It is only home improvements, such as replacing the roof, that are considered to increase the value of the house and hence your profit when you sell.
#7. Get Properly Insured
Usually your mortgage lender will require you to get a homeowner’s insurance, which you will be advised to purchase enough to cover the replacement of the house in case of a total loss. You are also required to purchase a life insurance when you are sharing the house with someone else who’s name is not on the mortgage document, they should be named as the beneficiary or else they will lose the house if you die unexpectedly.