You might believe that living in a large house is great. In a large house, you can have many rooms at your disposal. You can have a big gym, a mini-laboratory, pets, and a beautifully decorated garden. Additionally, you can host parties and dinners. However, the costs will start to add up. It can be extravagant, unnecessary, and, in some cases, unaffordable. Thus, one must do critical and analytical real estate calculations before making such a large purchase. Below are some hidden fees that come with large purchases in real estate.
General Costs of Large Purchases
Owners of large houses incur heavy costs. Generally, the average price of a new house is $84 per square feet, and the closing cost represents 3.5% of the price of that house. Additionally, the energy cost is $1.03 per square feet, the cost for maintaining a house is 1% of the home price, and the property tax is 1.3% per year. For a mortgage of 30 years duration, the additional cost of 500 feet of property is $42,000 for initial purchase, $8,400 for furnishing, $24,148 for mortgage interest, $16,506 for taxes, $1,470 for closing costs, $15,450 for energy costs, and $12,600 for maintenance.
The Cost of a Large Purchase for a Period of 30 Years Provided That You Have a Mortgage at 4%
If you have a mortgage at 4% for a 30-year period, the additional costs can be astronomical. There is an additional cost of $241,148 for a 1000 sq ft house, $361,722 for a 1500 sq ft house, $482,297 for a 2000 sq ft house, and $602,871 for a 2500 sq ft house. Therefore, you must count the cost before embarking on a large house purchase. The best advice is to consult real estate experts for elaborate explanations and guidance.
When you buy a large property, you might not think about certain costs. If you are not careful, these miscalculations can result in financial instability. Therefore, do rigorous calculations before jumping into a large purchase.