Do you own a property in Pittsburgh, but you aren’t sure why? Have you ever considered the costs of holding a property in Pittsburgh? If you have thought about it, that’s a good start, because it can be expensive! Before you hold on to it for another day, consider the below points. It might be time to think about selling your Pittsburgh home! So, what are the costs of holding a property in Pittsburgh? Keep reading to find out!
Costs of Holding A Property in Pittsburgh
Mortgage Payments
This is probably the most common expense people think of when owning a home. For those of you who have owned your home for a long time and have paid off your mortgage – this category doesn’t apply to you! However if you’re like most Americans, you’re still making monthly mortgage payments on your home. Once you sell your property, the bank gets paid for the remaining balance outstanding on the loan, and you get to keep the rest (less applicable taxes, fees, and other closing costs). That means no more money coming out of your pocket each month, and hopefully some money left over after all the expenses.
Property Taxes
Property taxes can be high depending on what part of the city you live in. Also, taxes can be very different within the City of Pittsburgh as compared to boroughs and townships just outside city limits. Wherever your house is located, look at your tax bill from last year and divide the amount you paid by 12. This is your monthly tax cost. Even though you likely only pay taxes once per year (or 3-4 times per year if you pay in installments), this is a daily expense. By selling your house in a timely manner, you can immediately end your tax obligation for the home.
Note: If you’ve already paid your taxes for the entire year, then you may even be reimbursed at the closing for taxes that you’ve paid, but will no longer be responsible for after you sell the property.
Insurance
The cost of homeowners insurance varies depending on the value and location of your home. However on average, Pennsylvanian’s can expect to pay about $801/yr. in home insurance premiums for a $200,000 home. This will vary depending on the extent of coverage you carry and the deductible amount. Similar to taxes, this is actually a daily cost even though you may only pay your premium 1-2 times per year. The sooner you sell your home, the sooner you can cancel your coverage and claim a refund for any premium payments already made and stop paying future premiums.
Utilities
Monthly utilities add up quickly, especially during the winter in Pittsburgh. If you have a vacant or under-rented property in Pittsburgh, it’s likely you are still paying for electricity, water, and gas. Many utility companies have a minimum charge each month, so even if you aren’t using these utilities there is still a base cost involved with keeping them active. The only way to eliminate this holding cost is to sell your house.
Maintenance & Repairs
It’s impossible to predict how much you will need to spend each year on maintenance and repairs, but many people use what’s known as the “1% rule”. This rule assumes that you will spend approximately 1% of the purchase price of your home on maintenance each year. For example, if you paid $150,000 for a home, you might spend $1,500 on maintenance this year. Obviously this doesn’t apply to a property purchased 20 years ago for $45,000. In that case, you might expect to pay much more than 1% due to the age of the property. Looking past the 1% rule, the important thing to keep in mind is that maintenance issues will always come up when you are holding a property, and they can be costly – especially for older Pittsburgh homes.
Opportunity Costs
This is very much a hidden cost of holding a property you no longer want. Simply put, opportunity cost is what you are giving up because you still own the home. There are two opportunity costs of holding a property you no longer want:
Opportunity Cost 1: What are you giving up by having to pay the monthly expenses associated with owning the home?
Opportunity Cost 2: What are you giving up by not having the full amount of money from selling the home?
If you didn’t have to pay a monthly mortgage and utility payments, perhaps you could treat yourself to a nice dinner out each month. Or, if you had the full proceeds from selling the home, maybe you could consider retiring early or taking a long-anticipated trip. Whatever the case may be, selling an unwanted home is the way to get rid of these opportunity costs.
Eliminate the Costs of Holding a Property in Pittsburgh Today!
Hopefully this article has shed some light on how costly it can be to own a property that you no longer want. If you decide that it’s time to sell one of your properties and want to work with an experienced company that can pay cash and close quickly, we would appreciate the opportunity to work with you. Unlike listing your property with a real estate agent, there are many benefits to working with us when selling your house (e.g., no commissions, faster closing, and we pay all closing costs)! If this interests you, fill out our form on this page or give us a call today at 412-785-7928. We look forward to hearing from you!