Being a first-time homeowner is one of the most exciting experiences in life.

There’s nothing like getting caught up in all the excitement of becoming a first-time homeowner, but some make mistakes that can jeopardise their entire investment.

It can be very beneficial for new homeowners to follow a few practical steps early in their homeownership journey in order to save time, money, and effort in the future.

Important Maintenance Can’t be Ignored

As a homeowner, you will have to make repairs on a regular basis.

In case of roof leaks or clogged toilets, there’s no landlord to call.

In addition, you won’t have to deal with rent increase notices taped to your door or sent to your email.

The nonessentials should be kept to a minimum, but any problems that may get worse should not be neglected.

Delays can result in relatively small problems becoming larger and more costly. Before purchasing a potential home, have it inspected to ensure that there are no maintenance issues.

Beware of overspending on personalisation

A down payment, closing costs, and moving expenses have just taken up a significant portion of your life savings.

Many first-time homeowners are struggling to make ends meet.

As a result of new costs associated with homeownership, such as water and trash bills and additional insurance, their savings are depleted, as well as their monthly expenses are often higher.

Don’t go on a massive spending spree just to improve everything at once when you move into a new home and upgrade what may have been temporary apartment furniture.

Your new status as a homeowner is just as important as getting your first home, and solid maple kitchen cabinets won’t jeopardise it.

You will still have the cabinets when you are able to afford them more comfortably when you adjust to homeownership expenses.

Ensure that you hire only qualified contractors

It is not a good idea to try to save money by making improvements or repairs you are not qualified to make. In addition to being a place where you live, your house is also an investment. If you value anything highly, you should give as much attention and care to it as you would to anything else.

Painting your garage walls yourself is fine, but do not cut a hole in the wall and start installing copper wiring if there is no wiring for electric openers. Keeping your home in top condition requires hiring professionals to handle jobs you don’t know how to do. This will prevent you from injuring yourself or even dying. In addition, make sure that you pull any necessary permits from your local building authority.

Get Help Filing Your Tax Return

It can be worth your time and money to hire an accountant, even if you are usually doing your taxes yourself.

No matter how financially challenged you are from the house purchase, don’t skimp on your tax preparation. If you want to maximise your refund, you should hire an accountant to make sure your return is completed correctly.

It is important to note that owning a home significantly changes people’s tax situations and their ability to deduct certain expenses.

If you decide to continue doing your taxes yourself in the future, just getting your taxes done by a professional for one year will provide you with a template to use.

What’s better: repairs or improvements?

It is unfortunate that not all home expenses are treated equally when determining how much your home is worth. It may be argued by the ATO that repairs are part of homeownership, and they preserve the home’s original value without adding to it.

There may be times when this isn’t the case. After repairing a lot of broken items in a foreclosure, the home may be worth more than before you repaired them, but the ATO doesn’t care if the home is worth more afterward.

The only way to reduce your future tax bill is to make improvements, such as replacing the roof or adding central air conditioning.

Also, don’t make the mistake of thinking that spending money on something is okay just because it’s a “repair”, it’s actually a fun improvement.

You don’t want to do that to your finances.

Retain improvement receipts

The costs you incur when selling your home can be used to increase your home’s basis, thus increasing your tax-free earnings.

Get Properly Insured

Purchasing homeowners insurance is not only required by your mortgage lender but also sufficient to completely replace the property in the event of a total loss.

As a homeowner, you need more than just homeowners insurance.

To make sure your house won’t be lost if you die unexpectedly, it’s recommended that you purchase life insurance with anyone relying on your income as a beneficiary.

In the same manner, disability income insurance can replace your income in the event that you are disabled and unable to work.

You will also want to make sure you have adequate car insurance when you own a home, as you have more to lose in case of a lawsuit.

Considering forming a corporation if you are a sole proprietor might be a good idea if you are self-employed.

An umbrella policy may also be beneficial, as it picks up where your other policies leave off.

Conclusion

Owning a home comes with a great deal of responsibility.

Your investment and family’s safety would be protected if you managed your finances well enough to maintain the house and keep it in good condition.

New homeowners shouldn’t let their excitement lead them to make bad decisions or overlook things that could compromise their financial and physical security.