Most homebuyers are preoccupied with a home’s asking price and required down payment during their search for a new residence. But there are other costs associated with homeownerhip that should be factored in – and Miami has some of the highest “hidden” costs of owning a home in the country.
That’s according to Realtor.com, which ranked the 100 largest metros by criteria such as property taxes, home insurance premiums, remodeling costs, utility costs and the price of local goods and services. The site found that Miami has the sixth-highest hidden homeownership costs of any U.S. city.
“Truth be told, there are all sorts of hidden costs that could turn your bargain basement deal into a den of financial horrors,” the Realtor.com report reads.
How Miami fares
Miami homeowners pay an average property tax rate of 1.2 percent, which is the sixth highest of any city in the top 10. States with a large contingent of wealthy homeowners generally have higher taxes, according to Realtor.com, and Florida certainly has some very expensive housing. But the state’s property tax rate is higher than other areas with very expensive housing, including Los Angeles (.7 percent) and Honolulu (.3 percent).
The Miami area has an average home insurance premium of $298 a month, tied for first with Cape Coral. Cities that are at-risk of floods and other natural disasters regularly have much higher insurance costs than in-land cities, and Miami is certainly no exception.
Miami residents pay an average utility bill of $188 per month. That places it in the middle of the pack of the top cities with highest hidden homeownership costs.
How to prepare
Researching such costs before buying a home can make the transition to homeownership smoother. Realtor.com suggests first-time homebuyers make a list of all the expenses related to homeownership that they expect to pay in the first year.
“Open a new savings account, and designate it as the ‘home account,'” financial advisor Jenna Rogers told Realtor.com. “Send the necessary amount to this home account every month. That way, when you have to pay property taxes, for example, you’ve already had the cash build up.”
