When we talk about buying a home, most of the conversation centers around the “PITI”—Principal, Interest, Taxes, and Insurance. But as a tech-savvy advisor who has lived in the San Fernando Valley for over two decades, I know that your true monthly budget needs to look a bit deeper.
In 2026, the cost of maintaining a home is rising faster than the average household income. To ensure you aren’t “house poor,” here is the educational breakdown of what you should actually be budgeting for.
1. The 1% Maintenance Rule
A common rule of thumb is to set aside 1% to 2% of your home’s purchase price annually for maintenance. In the Valley, where many of our beautiful traditional and mid-century homes have reached their “mature” years, this is essential.
- Pro Tip: Think of preventative maintenance (like gutter cleaning or HVAC servicing) as an investment. Spending $200 today can prevent a $12,000 repair next summer.
2. The “Valley Heat” Utility Factor
If you’re moving from the Westside or Santa Monica to Studio City or Sherman Oaks, your utility bill will look different. Our summer months require robust AC usage. I always suggest my buyers ask for a “utility history” during the due diligence period so they can see exactly what the gas and electric bills look like during a July heatwave.
3. Rising Insurance Premiums
Nationwide, insurance premiums have surged significantly over the last few years. In California, specifically in areas near the foothills, getting a standard policy can be complex. My service-first approach means I connect you with insurance specialists early in the process to ensure you aren’t surprised by a high premium (or a requirement for the CA FAIR Plan) just days before closing.
4. Supplemental Property Taxes
In California, most new homeowners receive a “Supplemental Tax Bill” a few months after closing. This is a one-time (or two-installment) bill that covers the difference between the previous owner’s tax rate and your new assessed value. Many buyers forget to set aside funds for this—don’t let that be you!
5. The “Smart Home” Upkeep
We love our tech, but smart irrigation, security cameras, and high-speed mesh networks all come with subscription fees and replacement cycles. When budgeting for your new “smart” lifestyle, don’t forget to factor in these recurring digital costs.
The Bottom Line: My goal isn’t just to help you buy a home; it’s to help you own it successfully. By looking at the full financial picture now, you can enjoy your new backyard without worrying about the “what ifs.”
