Budget plan when buying a house: what are the costs besides the price?

When buying a house, the budget plan is not only about the price of the house: repairs, furniture, appliances, moving money and spare money for the first months are also part of the total cost. If you calculate these costs in advance, you will not experience financial stress after the purchase. Below we explain each type of expense and how to plan for it.

Don't spend the entire budget on the price of the house

The most common mistake is to spend all the money saved on the house itself. As a result, a house is bought, but there is no money left for the things needed to live comfortably in it. A better approach is to divide the total budget into parts: the price of the house, the costs of preparation for the move and the reserve fund.

Let's take for example: your total means is 100,000 manats. In this case, it is safer not to allocate the entire amount to the house, but to allocate a part to repairs and furnishings, and a part to the reserve. The ratio depends on your situation: if you buy a renovated and furnished house, the additional cost will be less, if you buy a white frame or old renovated house, it will be more.

Repair costs

The need for repairs depends on the condition of the house. In a completely renovated house, it may be enough to paint only the walls, but in a white frame apartment, everything is built from scratch. When calculating the repair budget, write these items separately:

• materials: floor covering, wall covering, tiles, doors, plumbing;
• masters' wages;
• updating electrical and water lines;
• replacing windows and insulation;
• extra amount for unexpected works.

If you visit the house with an experienced craftsman, you can estimate the extent of the repair more realistically. Getting quotes from several craftsmen also helps you refine your budget. Most importantly, divide your repair list into "must-haves" and "can-be-later items".

Furniture and Appliances

When moving to a new home, not all old items will fit in the new place. If the size of the rooms is different, the sofa or cabinet may not fit, if the shape of the kitchen changes, it is necessary to reorder the kitchen furniture. Make a shopping list in order of priority:

1. What you need from the first day: bed, refrigerator, gas or electric stove, washing machine.
2. What you can buy in the first months: sofa, table and chairs, cabinets.
3. What you can wait for: decor, additional lighting, secondary appliances.

If you take into account the hot summer and cold winter of Nakhchivan, the expenses related to air conditioning and heating system plan separately. If you are buying a furnished home, this section is much shorter, but check the condition of the furniture and appliances during the inspection.

Before buying furniture, measure the rooms and make a small plan. This avoids the extra cost of buying the wrong size and then returning it or looking for another one. Reupholstering some of your old furniture, such as reupholstering, can be more cost-effective than buying new.

Moving costs

Moving may seem like a small task, but it has its own costs. The truck, movers, packing materials, disassembly and reassembly of some furniture should be included in the budget. If you're renting, make your move-in date coincide with the end of the lease so you don't have to pay for two places at the same time.

In the first few weeks after moving in, there are also small expenses: changing the lock, curtains, light bulbs, cleaning supplies. Individually, these seem like little, but together they add up to a noticeable amount. Moving sometimes doesn't fit in a day: if you don't have enough days off, lost work days become an indirect cost, so include this in the plan.

Reserve fund for the first months

A reserve fund is money saved for unexpected situations after moving in: a water pipe leak, an appliance breakdown, a temporary decrease in income. If you're buying a home with a loan, a reserve fund is even more important because the monthly payment must be made on time every month.

As a rule of thumb, try to keep a few months' worth of basic expenses -- utilities, food, transportation, and loan payments, if any -- intact. You can use the loan calculator to see in advance how much the monthly payment will be when buying a loan.

In addition to the reserve fund, consider the monthly maintenance costs of the new home. Heating in the winter, cooling in the summer, and yard maintenance can cost more in a large backyard than in an apartment. In the apartment, there may be payments made together with the neighbors for the general needs of the building. Asking the seller or neighbors for these amounts makes your monthly plan more accurate.

How to make a budget table?

Collecting all expenses in one table makes it easier to make decisions. Fill in the following simple form with your numbers:

After filling out the table, it becomes clear in which price range you should look for a home. It's then easier to browse current ads by this range.

Frequently Asked Questions

What's usually the biggest expense after the price of the home?

It's often renovations, especially on white-frame or older remodeled homes. In fully renovated and furnished houses, this cost is significantly reduced.

How much should the reserve fund be?

The exact amount depends on the income and expenses of each family. A general recommendation is to set aside an amount that can cover several months of basic expenses.

Does buying a renovated house save money on the budget?

It often saves time and effort to repair, but the price includes the cost of repairs. Check the quality of the renovation and whether it suits your taste during the inspection.

To find a home that fits your budget, Evim Imlak experts can provide options based on your price range. Send your questions from the contact page and let's build a plan that fits your needs together.