Common Expenses Homeowners Pay That Renters Don't Pay

As soon as you buy a home, many costs emerge outside of mortgage payments such as property taxes, insurance premiums, bills, maintenance, and HOA fees.

Costs associated with homeownership can quickly add up. To help you better understand this expense, we've compiled a list of common expenses only homeowners pay for that don't apply to renters.

Homeowner's Insurance

Homeowners insurance typically covers damage to both the structure of your home and its contents, as well as protecting you against liability claims and theft of personal belongings.

Your choice of homeowner's coverage depends on your specific needs and budget, so it is wise to compare insurers before purchasing or renewing existing policies.

HOA Fees

Homeownership within an HOA community comes with certain fees that must be paid; these cover costs associated with maintaining, repairing, and other expenses within the community.

HOA fees vary significantly based on the type of property you own; condos tend to be cheaper than co-ops.

As part of your HOA fees, a portion may also go toward the Reserve Fund; an account used for major repairs and replacements in the future.

Reserve Funds can also help mitigate much larger special assessments that may be levied by an Association if unexpected repairs become necessary, which can be an enormous financial strain for homeowners.

Maintenance and Repairs

Homeownership can be an integral component of life. But for others, buying one might not fit their lifestyle or financial situation.

Maintenance costs can be one of the greatest expenses of homeownership that tenants don't have to worry about. From roof repairs and replacing hot water tanks, homeowners need to budget for this expense.

As part of home maintenance costs, experts advise homeowners to set aside at least 1% of the value of their home for maintenance expenses, this way preventing unexpected issues from costing a lot more money in repairs than anticipated.


Utility services provide necessary functions that keep a home or apartment comfortable and running efficiently, including water, electricity, trash pickup services, heating/cooling/security options, and more.

Your utility company typically sends out bills every month or two depending on the area in which you reside, with charges determined by meter reading and energy use in your household.

Some utilities may be included with your rental payment while others must be set up and paid for separately. You should carefully consider all the factors before deciding how best to manage them with your rental rate.

Property Taxes

Local governments levy property taxes as part of their funding strategies for local services like police and fire departments, schools, roads, and other municipal projects.

As a homeowner, your property taxes are calculated based on the assessed value of your property - this varies greatly depending on the jurisdiction in which you live and is determined by an appraisal report issued annually by a local assessor.

Homeowners and landlords pay property tax, while renters do not. Most renters don't even realize it because it isn't included as part of their lease or invoice in their rental portal.

Before you decide to buy a home in Madison, make sure you understand all the financial commitments that come along with homeownership.

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