As surprising as it may sound, homes can sometimes become financial liabilities. And when they do, it’s often hard to know what to do about it. That’s because the ways they can make you suffer financially vary considerably.
If you’re confused, this guide can help. It looks at why your property might be causing you financial issues and what you can do about it.
Unexpectedly High Maintenance Costs
First, you might run into the issue of unexpectedly high maintenance costs. You might own an older home with a leaky roof or unstable foundations that’s costing you a lot of money.
The trick here is to get into a routine of setting aside money for maintenance. Older properties cost more to maintain, but they also have character, which brings value to the market. Many people are prepared to pay more for a property if it’s been looked after and still has original features from the past. Usually, 1-3% of the home’s value paid into it consistently is all you need to keep it afloat.
Higher Property Taxes
Another issue you might face is higher property taxes in your area or higher payments because the property value has gone up. When this happens quickly, it can be a shock, and the payments can outpace your income, especially if you rely on fixed-income investments.
The solution is to look at your property tax and see if it is inflated. Sometimes, the calculations can be wrong. You can also seek reductions or exemptions based on your status or ultimately move if the bills are too high to stay where you are right now.
Planning Violations
You may also be facing planning violations on your property, making it more challenging to sell. You may have made zoning changes that go against the rules or upset the authorities.
If you’ve violated ordinances, however, you still have options. The best approach is to go to buyers with experience in dealing with these issues. They can provide the funds needed without you worrying about how you’re going to sell to a regular buyer.
High Utility Costs
If high utility costs are an issue, it also suggests a problem with your property. You might have poor insulation or outside appliances that are costing you a lot of money.
There are two ways to approach this issue. The first is to simply find a better carrier–someone who’s prepared to offer you lower prices.
The other approach is to modify your home to bring down the costs if they are excessive. Check in your neighborhood to see what average bills are for your area so you have a benchmark of what to aim for in your property, replacing regular lights with LEDs and opting for low-flow showers instead.
HOA Fees Increase
Finally, you might be facing HOA fee increases if you’re a part of a homeowners’ association. When this happens, it usually means that the cost of repairs for shared facilities is rising.
The solution is to look into the HOA’s financials before you buy. If it’s in a shaky situation, the chances of an increase later are much higher.