Categories: Featured

by CurtlyF


by CurtlyF


Forgotten Costs When Buying A Property

Often when people buy a house they only think about the lawyer’s fees and of course the price of the property. Forgotten property costs refer to expenses associated with owning a property that can easily be overlooked or forgotten. These costs can add up over time and may come as a surprise to property owners who have not adequately planned for them.

Some common forgotten property costs include:

  1. Maintenance and repairs
  2. Property taxes
  3. Insurance premiums
  4. Utilities
  5. Service Charges
  6. Capital improvements

1. Maintenance and repairs

Regular maintenance and repairs are essential to keep a property in good condition, but the costs associated with these tasks can be easily forgotten or underestimated. This can include a range of tasks such as painting, plumbing repairs, electrical repairs, (Heating, ventilation, and air conditioning) HVAC maintenance, and landscaping.

Maintenance tasks are typically routine and preventative in nature and are designed to keep the property in good working order. This can include tasks such as:

  • Regular cleaning and upkeep of common areas
  • Changing air filters in HVAC systems
  • Regular inspections of plumbing, electrical, and HVAC systems
  • Seasonal maintenance tasks such as gutter cleaning or roof inspections
  • Regular pest control treatments
  • Landscaping and gardening tasks

Repairs, on the other hand, are typically reactive in nature and are necessary to address issues that arise with the property. This can include tasks such as:

  • Repairing leaks or water damage
  • Fixing broken appliances or fixtures
  • Replacing damaged flooring or walls
  • Repairing or replacing roofing materials
  • Addressing structural damage or foundation issues

Property maintenance and repairs are essential to the long-term health and value of a property. Neglecting maintenance tasks or delaying repairs can lead to more significant problems over time, resulting in higher repair costs and potential safety hazards for residents or tenants. Property owners or managers should create a maintenance and repair schedule and budget in order to ensure that the property is properly cared for and any issues are addressed promptly.

2. Property taxes

In Ghana, property taxes are imposed on all real estate properties. Property taxes in Ghana are levied by the local government authorities, such as district assemblies, and are calculated based on the assessed value of the property.

The assessed value of the property is determined by the Ghana Revenue Authority (GRA), which takes into account factors such as the location, size, and condition of the property. Property owners are required to submit an annual declaration of the value of their property to the GRA, which is used to calculate the property tax bill.

It is important for property owners in Ghana to pay their property taxes on time, as failure to do so can result in penalties and interest charges. Additionally, failure to pay property taxes may result in legal action by the local government authority, which may include seizing and selling the property to recover the outstanding taxes.

Overall, property taxes in Ghana are an important source of revenue for local government authorities, and property owners should be aware of their obligations and ensure that they comply with the requirements of the Property Tax Act in order to avoid penalties and legal action.

3. Insurance Premiums

Property insurance is a type of insurance policy that provides protection against damage or loss to a property.

Property insurance typically covers damage or loss caused by a range of perils, including fire, theft, vandalism, natural disasters, and other unexpected events. The specific types of perils covered will depend on the policy, and property owners may have the option to purchase additional coverage for specific types of risks or hazards.

Overall, property insurance provides valuable protection for property owners, helping to mitigate the financial risks associated with unexpected events and providing peace of mind that the property is protected. It is important for property owners to carefully review their insurance policies and ensure that they have adequate coverage for their specific needs and risks.

Insurance premiums are the amount of money that a policyholder pays to an insurance company for an insurance policy. Insurance premiums are typically paid on a regular basis, such as monthly, quarterly, or annually, and the amount of the premium is determined by a variety of factors.

The cost of insurance premiums can be overlooked or underestimated. Insurance costs may also increase over time, particularly if the property value increases or if the homeowner files multiple claims.

Premiums are calculated based on many factors such as:

  1. Risk factors: Insurance premiums are based on the perceived risk of the policyholder filing a claim. For example, a policyholder who drives a high-performance sports car may pay a higher auto insurance premium than someone who drives a more modest vehicle.
  2. Coverage limits: The amount of coverage provided by an insurance policy can affect the cost of the premium. For example, a policy with a higher coverage limit may cost more than a policy with a lower coverage limit.
  3. Deductibles: The deductible is the amount that the policyholder must pay out of pocket before the insurance company will pay out on a claim. A higher deductible can result in a lower premium, while a lower deductible can result in a higher premium.
  4. Location: The location of the policyholder can also affect the cost of insurance premiums. For example, a policyholder living in an area with a high crime rate may pay more for homeowner’s insurance.

4. Utilities

Property utilities refer to the essential services that are required to maintain and operate a property. These services include electricity, gas, water, and sewage, as well as internet and telephone services.

Electricity is used to power lighting, heating, air conditioning, and other electrical systems within a property. Gas is typically used for cooking, heating, and hot water systems, while water is used for drinking, cleaning, and bathing. Sewage systems are used to dispose of wastewater and sewage from the property.

In addition to these basic utilities, internet and telephone services are becoming increasingly important for property owners and tenants. Internet and telephone services provide access to communication and information resources, as well as entertainment services such as streaming video and music.

Property owners and managers are typically responsible for arranging and maintaining utility services for their properties. This may include negotiating contracts with utility providers, paying utility bills, and addressing any issues or concerns related to utility services.

Tenants are typically responsible for paying for their own utilities, either directly to the utility providers or through their property owners or managers. In some cases, landlords may include utilities as part of the rent, but this will vary depending on the rental agreement and local regulations.

Overall, property utilities are essential to the functioning and comfort of a property, and property owners and tenants should ensure that these services are properly maintained and managed in order to avoid disruptions and ensure efficient and effective use of resources.

Utility costs can also vary and be effected by global prices and inflation for example.

5. Property Service Charges

Property service charges are fees that are charged to cover the cost of services and maintenance for a property or building that is owned and managed by a property management company. These charges are typically paid by tenants or property owners and cover a range of expenses associated with the management and maintenance of the property.

Property service charges can include expenses such as:

  1. Building maintenance and repairs: This can include the cost of repairing and maintaining common areas such as hallways, elevators, and stairwells, as well as building systems such as heating, ventilation, and air conditioning (HVAC).
  2. Property management fees: This can include the cost of hiring and managing property managers and other staff members who are responsible for maintaining and managing the property.
  3. Utilities: This can include the cost of providing utilities such as electricity, gas, water, and sewage to the property.
  4. Insurance: This can include the cost of insuring the property against potential risks such as fire, theft, and natural disasters.
  5. Property taxes: This can include the cost of paying property taxes on the property.
  6. Landscaping and gardening: This can include the cost of maintaining the property’s landscaping and outdoor spaces.

The specific services covered by property service charges will vary depending on the property and the management company. Property service charges are typically calculated based on the size and type of the property, as well as the specific services provided.

It is important for tenants and property owners to carefully review the property service charges and ensure that they understand the services covered and the cost of those services. Property service charges can be an important component of the overall cost of owning or renting a property, and understanding these charges can help to ensure that they are properly managed and allocated.

6. Capital Improvements

Property capital improvements are major investments made in a property with the goal of increasing its overall value, extending its useful life, or improving its functionality. These improvements are typically more significant than routine maintenance or minor repairs and are intended to provide long-term benefits to the property.

Examples of property capital improvements can include:

  1. Major renovations: This can include significant remodelling or upgrading of the property, such as adding additional rooms or modernizing the kitchen or bathrooms.
  2. Structural improvements: This can include replacing the roof or repairing the foundation of the property.
  3. Upgrades to building systems: This can include installing new heating and cooling systems, upgrading electrical or plumbing systems, or installing a new security system.
  4. Landscaping and outdoor improvements: This can include adding or improving outdoor spaces such as patios or decks, installing a new fence or retaining wall, or improving landscaping and irrigation systems.
  5. Energy-efficient improvements: This can include adding insulation, upgrading windows, or installing solar panels to improve the property’s energy efficiency and reduce ongoing energy costs.

Property capital improvements are generally considered to be long-term investments in the property, and their costs can be spread out over time. These improvements can add value to the property, increase its functionality, and attract tenants or buyers who are willing to pay a premium for these upgrades.

It is important for property owners to carefully consider the potential benefits and costs of property capital improvements and to ensure that any improvements made are consistent with the overall goals and objectives of the property. Proper planning and execution of capital improvements can help to ensure that the property remains attractive and valuable for years to come.








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