Many people decide to hold onto their properties for sentimental reasons or with the intent to fix and flip it, but the costs of holding a property in DC can eat away at your wallet. If it’s not your primary residence, a rental, or your vacation spot, then you may want to consider selling it. Every day that you continue to own the property, you are spending money on it. But what exactly are the costs of holding a property in DC? Keep reading to find out!
Costs of Holding A Property In DC
Property Taxes
Property taxes in DC can be extremely high, sometimes up to $5,000 a year, and unfortunately, they are no longer deductible either. As long as you are listed as the owner of the home, you will be responsible for the taxes on it. By selling your house in a timely manner, you can immediately end your tax obligation for the home.
Utilities
Monthly utilities add up quickly. If you were to add up the amount you’ve spent on electricity, water, gas, tv, and internet you might be surprised at how high that number is. Even if you aren’t residing in the home while selling it, you will still need to keep the lights and the water on for the people who come to see your house. If your house is older and less energy efficient, you are likely to have utility bills significantly higher than what you would find in a new home.
Maintenance & Repairs
A good rule of thumb for maintenance costs is the one percent rule. This rule states that you should plan to spend about one percent of your purchase price on maintenance each year. For example, if your house was purchased for $300,000, you should plan to spend about $3,000 on home maintenance each year. Of course, these numbers can vary widely, especially in DC.
Homeowners Insurance
The premium for a homeowners insurance policy will vary based on the house and its location. You can expect to pay over $1500 annually for an average DC home.
Mortgage Payments
It can be difficult to come up with a mortgage payment each and every month for a property you don’t want to own. According to Lending Tree, the average DC mortgage payment is around $1700 each month. Some people struggle to pay thousands of dollars each month when in reality they would be much better off selling the property.
Opportunity Costs
What else could you be doing with the money you have tied up in the house? You could very well be missing out on a better home or investment opportunity. Look around at what else is out there and decide if you are truly happy with your current situation. If your property isn’t doing anything for you, it might be time to find something new!
As you can see, holding a property can cost a lot more than expected. Often, selling your home now as opposed to later can help you keep more money in your pocket. For every day you continue to own it, you will also continue having to be financially responsible for it. The bills and maintenance costs add up quickly. Run the numbers for yourself and make the decision that makes the most sense for you!