There are some cities that have a high cost of living, and some cities where it is quite cheaper. The chances are that you might be depressed if living in a high-cost-city, especially if you have friends and relatives constantly urging you to cheaper cities.
While you may pay less for a house, but there are many other factors to consider if you are moving only for saving money. There are other things that will determine if your financial benefits are as much as you are thinking.
Tax Values:
Property taxes vary from one city to another. The 2008 rates for Houston were 2.5 percent, Los Angeles 1 percent and New York 12.1 percent. There is contrasting difference between rates as you might notice. You need to properly ascertain the property tax values for the city you are considering moving to.
Cost of Furnishing:
Depending on the size of the house, you might be needing more or less furniture. Many first-time homeowners end up losing a lot of money on furnishing because they conveniently forget to include it in their budget plans during house-buying. If you are buying a larger house than your present one, chances are you will lose a lot of extra money for added furnishings.
Costs of Maintenance:
As the size of the house increases, so does the maintenance cost. If you plan to move to a bigger house, then be prepared to spend some extra cash on repairs, lawns and landscaping, home maintenance and homeowner’s insurance premium.
Energy costs:
If you are presently living in a high-cost city with mild climate, then your energy bills will be pretty average. That will change if you move to a cold-climate or a hot-climate low-cost city. The money saved on buying the house, will be cancelled out by the increase in your energy bills.
Renovating and Remodeling costs:
Whether you are planning to live in your house for a long time or plan to increase its value for resale, you might be doing some sort of remodeling. Remodeling costs always increase with a bigger house. So take that into account if you are planning to move to a larger house.
State and Local Income Tax Values:
The state tax value is a very important factor in determining if your move will be a prosperous one or not. There are many states that impose no taxes, yet there are many that charge a lot.
Keeping up with your Wealthy Neighbors:
If you have psychological strength, then this factor plays no role. Yet many people fail to ignore it. The truth is that if you move from a high-cost city to a low-cost city, then you will buy a house in a posh area. This will result in you spending extra money on designer clothes, luxury cars and other similar things, only because you now have neighbors who do so.
Cost of Transaction:
If you are planning to sell your present house and move into a new one, there will be extra costs apart from the buying price. You will have to pay the real estate’s commission, and spend on closing mortgage. You might also have to add remodeling money to the house you are selling to increase its resale price. Then you will also spend on your new one to make it better suitable to your taste.
Average age of Houses in Neighborhood:
If you are moving to a relatively newer neighborhood, then chances are that your house is a new one. If you are moving into an older neighborhood, your house might be more than a hundred years old. This means that there will be repairs needed that will cost extra cash.
Interest rate values:
Interest rates play an important role. They determine how much mortgage payment you will have to pay every month. Check these rates before moving.
Conclusion:
The price of the house you are buying isn’t the only thing worth considering if you are making a move. There are plenty of other issues that will determine if you will benefit financially from the move or not. So be careful and weigh out all options before you uproot your life.
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Posted by Batool Shamim in Real Estate · 0 Comment
