10 Dos and Don’ts of New Homeownership
Congratulations! You just joined the very special group of people known as homeowners. As you’ve probably heard, owning a home is the American Dream, and one of the best investments you’ll ever make.
But as a new homeowner, there’s probably a lot you don’t know. If you’re going from renting to owning, we’ve got some news for you—all those things your landlord used to take care of are your problem now. It’s also important to keep in mind that you’re likely to live in your new home longer than you would in an apartment, so the habits you establish now could stay with you for a long time.
With this in mind, here are the 10 things you should know as a new homeowner. This list could be much longer, but we’re going to limit it to the top 10:
1. Get to know your neighbors
The best thing you can do for both the short- and long-term is get to know your new neighbors. They will become priceless sources of local information, helping you find the necessary services and products in your new neighborhood. They may even know things about your home from the previous owner that could save you time and headaches.
If you’re lucky, your neighbors will also become lifelong friends that will turn your new neighborhood into someplace special.
2. Don’t spend too much to make it your own
It’s incredibly tempting when you buy a new home to invest in improvements right away and really make the home your own. Resist this temptation. You’ve just spent a large portion of your life savings to buy the home and move in, so money is probably pretty tight right now. On top of that, you’re still getting used to all the monthly expenses that come from owning a home. Give yourself some time to adjust to the monthly expenses of being a homeowner before you pay someone to start swinging that hammer.
3. Get all the necessary insurance
Your lender requires you to get homeowner’s insurance in order to finance the loan with you, but that’s not the only type of insurance you should get. If you’re sharing the home with someone who depends on your income to pay for the mortgage, like a spouse or family members, you should get life-insurance with that person as your beneficiary. That way the mortgage will be covered should something happen to you.
For the same reason, disability-income insurance is a smart investment should something happen to your ability to earn an income.
4. Learn about important maintenance
We’ve already said it a couple of times, but you’re in charge of taking care of your property now, not your landlord. And while we’ve already warned you about spending too much to improve your home, there’s one area that you should never skimp on—maintenance.
Get to know your appliances and mechanicals, especially your HVAC system and hot water heater. If any of them require some work or to be replaced, take care of it right away. These aren’t the most exciting things to be spending money on in your home, but you do not want anything to go wrong with them. Then you’ll be looking at more money to replace them, and perhaps even the cost to clean up the mess that not fixing them in the first place made.
5. Find a reliable handyman
Speaking of maintenance, find the contractors and handymen that will help you take care of your investment. A reliable handyman is worth their weight in gold. This is where getting to know your neighbors comes in. Ask them for recommendations. And don’t try to repair something on your own that’s above your skill level.
6. Organize all your warranties and manuals
You likely received a file folder of manuals and important documents about all of your appliances from the previous owner. And you likely also put that folder away somewhere and forgot about it.
Well, go find that folder and go through it. It will have information about troubleshooting and repairs for your appliances, as well as warranty information. If something is to go wrong in these big ticket items, you’ll know the first place to look. It’s also a great idea to scan digital versions of these documents, so you’ve got a digital backup.
7. Change the locks
You don’t know who has a copy of your home’s keys when you first move in, and you don’t want to find out the hard way. Call a locksmith and have them change the locks and you’ll sleep easier every night you spend in your new home.
8. Replace the air filters
Your new HVAC system requires a little bit of yearly maintenance, and when you move in is a great time to get started. Find out what kind of filter your HVAC needs, and where it should go. Make the trip to your local hardware store or home center and purchase a few years’ worth of those filters so you’ll have plenty. Once you’ve properly inserted the filters, set a reminder on your phone to replace them again in six months.
9. Keep your receipts
Once you’ve settled in and gotten used to the monthly budget, you’ll likely decide at some point to invest in some upgrades. As you make improvements to your home, hold onto your receipts. Once you sell your home, you may be subject to taxes on a portion of your profits. But if you save the receipts from the improvements you make, you may be able to reduce the amount you’ll have to pay in taxes on the sale. Work with a tax expert to find out if you’re eligible for savings.
10. Find a good tax person
And finally, owning a home has many benefits when tax time rolls around, but it’s likely you’ll need an expert to help you take advantage of all of them. That’s why you should definitely use a tax professional to help you prepare your taxes.* They will probably be able to find tax savings and alert you to issues with your return that you may be able to counter with different behaviors.
Owning a home is a greater responsibility than renting, but most people agree there’s also a greater reward from homeownership. It may take you a little while to get used to all of your new duties, but once you do, you’ll take great pride in making your new house feel like a home.
*Guaranteed Rate does not provide tax advice. Please contact your tax adviser for any tax related questions.
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