What Kinds of Expenses Should You Budget For When Buying an Older Home?

Buying an older house can be so exciting! You may be drawn to buying an older home vs. a new build because of it’s character and charm, sense of community in an established neighborhood, or sense of history. Maintaining and upgrading an older home though, can be costly!

When buying an older home, there are several common expenses to anticipate beyond the purchase price. Here’s a detailed breakdown of potential costs you might encounter:

1. Home Inspection

• Cost: $300-$500
• Purpose: Identify issues with the home’s structure, systems, and safety. Essential for avoiding unexpected repairs and a responsible thing to do for any home you’re buying! Check out our guide to home inspections.some text
  • Pre-Purchase Diligence: This step is crucial for understanding the true condition of the property and can help you make an informed decision about proceeding with the purchase. It may also give you leverage to negotiate repairs or adjustments to the purchase price. Although the cost might seem high, investing in a home inspection can save you from unexpected repair costs and ensure you are aware of any significant issues before buying.

2. Pest Control

• Cost: $100-$500 (or more for extensive treatments)
• Purpose: Deal with potential infestations of termites, rodents, or other pests.some text
  • Types of Pests to Look For: Common issues in older homes include termites, rodents, and ants. Each requires different treatment methods, ranging from bait systems and sprays to professional extermination services.
  • Prevention: Investing in pest control not only addresses current issues but can also help prevent future infestations. Regular maintenance and monitoring might be necessary to keep pests at bay.

3. Lead and Asbestos Testing/Abatement

• Cost: $300-$700 for testing; $1,000-$5,000+ for abatement
• Purpose: Ensure safety from hazardous materials, especially in homes built before 1978.some text
  • Testing: Lead and asbestos testing is important in older homes as these materials can pose serious health risks. Testing identifies the presence of these hazardous materials.
  • Abatement: If lead or asbestos is found, abatement involves removing or sealing off these materials to prevent exposure. This process requires specialized professionals and can be costly.
  • Safety Compliance: Ensuring that these hazards are addressed protects the health of the occupants and ensures compliance with safety regulations.

4. Insurance

• Cost: $800-$2,000 annually
• Purpose: Coverage for the home, which may be higher for older properties due to increased risk or higher replacement costs.some text
  • Coverage: Home insurance provides protection against various risks, including damage from fire, storms, theft, and liability issues. Older homes may have higher premiums due to their increased risk profile and potentially higher replacement costs.
  • Premiums: The cost of insurance can vary based on factors such as the home’s age, location, condition, and the coverage limits you choose.

5. Utilities

• Cost: Varies
• Purpose: Older homes might have less efficient systems, leading to higher heating, cooling, and water bills.some text
  • Upgrades: Investing in energy-efficient upgrades, such as better insulation, modern windows, and efficient appliances, can help reduce utility bills over time.

6. Permits and Code Upgrades

• Cost: $100-$2,000+
• Purpose: Obtain necessary permits for renovations and ensure work meets current building codes.

7. Window Replacement

• Cost: $300-$1,000 per window
• Purpose: some text
  • Energy Efficiency: Older windows are often less energy-efficient. Replacing them with modern, energy-efficient windows can reduce heating and cooling costs and improve comfort. Look for windows with good insulation ratings.
  • Window Types: Costs vary depending on the type of window you choose—single-hung, double-hung, casement, or bay windows, for example. Custom or historic-style windows can be more expensive.
  • Installation: Proper installation is crucial to ensure windows are sealed correctly and perform well. Professional installation is recommended, especially if there are structural concerns or the windows are custom-sized.
  • Historic Considerations: If the home is a historic property, you may need to adhere to specific guidelines for window replacement to maintain its historical value. This could involve custom windows or specific materials and finishes.

8. Exterior and Interior Painting

• Cost: $2,000-$7,000+
• Purpose: some text
  • Interior Paint: Older homes might have outdated or damaged interior paint. Repainting can improve aesthetics and protect walls. Factor in the cost of paint, primer, and labor if you're hiring professionals. DIY painting can save money, but professional painters can ensure a high-quality finish.
  • Exterior Paint: The exterior of an older home may also need painting. This involves more preparation work, such as scraping off old paint, repairing surfaces, and priming. Exterior paint also needs to be durable and weather-resistant.
  • Lead Paint: If the home was built before 1978, it might have lead-based paint, which requires special handling and removal procedures to ensure safety. This can significantly increase the cost of painting.

9. Landscaping

• Cost: $500-$5,000+
• Purpose: Update or restore the yard and garden areas, which may be neglected in older homes.

10. Roof Replacement

• Cost: $5,000-$15,000+
• Purpose: Ensure the roof is in good condition or upgrade it if it’s old or damaged. This can help improve energy efficiency as well. 

• Materials: The cost can vary significantly based on the roofing material you choose. Options include asphalt shingles, metal roofing, slate, or tile. Each has its own price range and lifespan. Asphalt shingles are generally the most affordable, while slate and tile are more expensive but offer greater durability and aesthetic appeal.
• Installation: Proper installation is crucial to ensure the roof is weather-tight and functions effectively. Professional installation is recommended, especially if the roof involves complex angles or if structural issues are discovered during inspection.

11. HVAC System

• Cost: $3,000-$7,000+
• Purpose: Update or replace heating and cooling systems to ensure efficiency and comfort. some text
  • System Type: Costs vary depending on the type of HVAC system you choose. Options include central air conditioning, heat pumps, or ductless mini-split systems. Each has different installation requirements and efficiency levels.
  • Efficiency: Modern HVAC systems are designed to be more energy-efficient than older models, which can result in lower utility bills. Look for systems with high Seasonal Energy Efficiency Ratio (SEER) ratings for air conditioning and high Annual Fuel Utilization Efficiency (AFUE) ratings for heating.
  • Installation: Proper installation is essential for system performance and longevity. Professional installation is recommended to ensure the system is correctly sized and installed according to manufacturer specifications.
  • Upgrades: If the home has an old or outdated system, upgrading to a new HVAC system can improve comfort, air quality, and energy efficiency. It may also involve adding or updating ductwork to accommodate the new system.

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12. Plumbing and Electrical Updates

• Cost: $1,000-$10,000+
• Purpose: Upgrade outdated systems to prevent issues and meet current safety standards.some text
  • Plumbing: Older homes might have outdated or deteriorated plumbing systems. Replacing old pipes, installing new fixtures, or upgrading to modern materials like PEX (cross-linked polyethylene) can prevent leaks and improve water pressure.
  • Electrical Systems: Outdated electrical systems can be a safety hazard and may not meet current code requirements. Upgrading the electrical panel, rewiring, or installing new outlets and switches can improve safety and accommodate modern electrical demands.
  • Safety and Code Compliance: Both plumbing and electrical updates are crucial for safety. Ensure that all work is done according to local building codes and regulations, which may require permits and inspections.

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13. Contingency Fund

• Cost: Typically 10-20% of purchase price
• Purpose: Reserve funds for unexpected repairs or issues that arise after purchase.
• Amount: The amount you set aside should be based on the purchase price of the home and your overall budget. For example, on a $300,000 home, a 10-20% contingency fund would range from $30,000 to $60,000.

Anticipating these costs and planning accordingly can help you manage the financial aspects of buying and owning an older home, ensuring you’re prepared for both expected and unexpected expenses.

If you’re saving for your first home, join Foyer to prepare for your purchase with confidence! 

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