You’ve saved up for a down payment, gotten pre-approved, and found your dream home. Great! Now, you’re ready to buy your dream home, right? That’s what most people believe. However, in 2025, the price of the home is just the starting point.
3. Inspections and move-in expenses. Home inspections are essential but come with costs. A general inspection can range from $300 to $500, depending on factors like location, size, and age of the house. Specialized tests, like mold or radon, cost more. Then there are repair costs, pest treatments, and possibly appliance replacements. Don’t forget move-in expenses like blinds, new locks, paint, or landscaping, which can add another few thousand dollars.
4. HOA fees and one-time community charges. If your new home is in a homeowners association (HOA), don’t assume the monthly dues are the only costs. Many HOAs charge one-time fees at closing, such as transfer fees or initiation fees. The average monthly HOA fee in the U.S. is $291 and is non-negotiable. To avoid surprises at closing, request a full breakdown of HOA financial obligations before making an offer.
5. Utility setups and hidden service deposits. It’s easy to overlook utility setup costs when you’re focused on buying, but they can add up quickly. Many providers require deposits, especially if you’re moving from out of state or have a limited credit history. These deposits for electric, water, gas, internet, and trash service can total several hundred dollars. You might also need to prepay your first month of service, along with one-time fees for mailbox keys or local permits.
Buying a home in 2025 is a significant milestone and investment. Hidden fees and unexpected expenses can add up quickly, and if you’re not prepared, they can throw your budget off track. Preparing to buy is more than just getting your down payment ready; being informed can help you avoid financial surprises at the closing table.
Need more guidance? Let’s connect. Feel free to call, text, or email me. I’ll be happy to help.
“There’s a lot more you need to pay for than just down payment costs.”
This deduction reduces your taxable rental income. If your property brings in $25,000 in annual rent and you spend $10,000 on expenses like taxes, insurance, maintenance, and management, you are left with $15,000 in net income. Subtracting your depreciation deduction lowers your taxable income further. However, as time goes on and your property appreciates, your equity increases, but the depreciation amount stays the same. Eventually, you may lose the benefit of this write-off entirely.
1031 exchange. One way to maximize your return in this situation is through a 1031 exchange. This allows you to sell your existing rental property and purchase a new one without paying taxes on the gain, as long as you follow the IRS guidelines. Doing so restarts the depreciation timeline, giving you a fresh deduction schedule.
Over time, the value of the property and the rental income tend to increase, but the depreciation benefit on your original property remains fixed or eventually disappears. By repositioning into a new investment, you can maintain that tax advantage and improve your overall financial outcome.
Whether you’re preparing to sell, exploring a 1031 exchange, or considering buying your first rental property, understanding how depreciation affects your strategy is essential. If you have questions about the process or want to talk through your next move, feel free to reach out. You can call me at 904-405-1995 or send an email to Jeff@PursuitRealEstate.com. I’d be happy to help.
