You’ve bought your house. You’ve scheduled the movers and are packing your boxes. The checklist of things to consider seems overwhelmingly long, but there is an end in sight: you will leave your current residence and move. That’s a fact.
One thing that sometimes gets overlooked in the fun of planning the move are the practical parts of life. Things like keeping the lights on, the water flowing, and the air moving.
When purchasing a home in Indianapolis, understanding the full scope of homeownership costs is essential. Beyond the purchase price, several ongoing expenses can impact your monthly budget. Here’s an overview of some of the main costs: property taxes, home insurance, and utilities.
1. Property Taxes
The good news is that Indianapolis property tax rates are generally more affordable than those in many other major U.S. cities, but they can still vary significantly depending on the neighborhood. Property taxes in Indiana are calculated based on the property’s assessed value and can be adjusted annually. The average effective property tax rate in Marion County, which encompasses most of Indianapolis, is about 0.88%. For a $200,000 home, this would mean an annual assessment of approximately $1,760. However, certain neighborhoods with higher property values may see slightly elevated rates, while more affordable areas may see lower rates.
To help manage property tax costs, Indiana offers a Homestead Deduction, which provides homeowners a significant reduction on their assessed property value if the home is their primary residence. Each homeowner may claim one homestead deduction. So if you own multiple homes, the deduction can only be applied once. There are also mortgage deductions and tax caps that limit increases in property taxes, especially for owner-occupied homes. Understanding your tax rates is an important consideration when buying a home. Make sure to ask all of the questions–oftentimes, your property tax fees are built into your monthly mortgage payment and sit in escrow for the twice a year billing cycle. Your REALTOR® at the Yosha Snyder Group will make sure you have all of the information you need since taxes vary by county.
2. Home Insurance
Home insurance is another essential cost for Indianapolis homeowners. Home insurance premiums vary depending on the size of the home, its location, and the type of coverage chosen. In general, homeowners in Indianapolis can expect to pay an annual premium ranging from $700 to $1,300.
Insurance rates can be higher in neighborhoods where homes are older or at greater risk of weather-related damage. Some Indianapolis neighborhoods with older homes, like Fountain Square or Meridian Kessler, may see higher premiums due to the increased likelihood of necessary maintenance. Conversely, areas with newer construction, such as the northern suburbs of Carmel and Fishers, often enjoy more affordable premiums.
Also, your home’s proximity to water may also factor into the equation. Real estate along the White River may be susceptible to flooding, so flood insurance may be required.
No matter what you need, you should shop for homeowner’s insurance. And once you select a policy, make sure to review it each year to determine if your needs have changed.
3. Utilities
Utility costs are a necessary consideration, with monthly bills that can fluctuate depending on the season and neighborhood. Indianapolis residents typically pay for electricity, natural gas, water, sewer, and waste collection. Here’s a breakdown of average utility costs and services:
- Electricity: Electricity in Indianapolis is provided primarily by AES Indiana. Monthly costs can range between $100 and $150, depending on the size of the home and season. Summers, with air conditioning running, tend to be higher, with winter months often requiring less usage.
- Natural Gas: Citizens Energy Group is the main supplier for natural gas in Indianapolis. Average monthly costs are around $80, but this varies significantly in winter as homeowners increase heating. Larger homes and older properties with less insulation might see higher gas bills.
- Water and Sewer: The average water bill in Indianapolis is around $35 to $45 per month, with sewer charges usually added at a similar rate. Combined, homeowners might budget about $70 to $90 monthly for water and sewer services.
- Waste Collection: Waste collection fees in Indianapolis are relatively affordable. On average, residents pay about $10 to $15 per month for trash and recycling services. These services vary by neighborhood and cities.
- Internet and Cable: This utility offers the most diversity in choice. Different areas have different types of services. Plan on paying anywhere from $65 a month for internet access. Cable access is usually separate but bundling internet, cable, and phone will often afford you some savings. And just like with your insurance, pay attention to the bill and don’t hesitate to try to negotiate a better rate after your introductory period ends.
Cost Variability by Neighborhood
Homeownership costs can vary by neighborhood. More affluent areas like Williams Creek and Geist may have slightly higher property taxes and insurance due to property values, while emerging neighborhoods such as Riverside may offer more affordability. Additionally, some suburbs around Indianapolis, like Fishers or Greenwood, may have their own municipal utility services, leading to slight cost differences.
Final Thoughts
Understanding these recurring costs helps new Indianapolis homeowners budget more effectively. If all of this still feels a little overwhelming, here’s a great checklist to guide you through everything you need to do. Taking the time to review potential utility expenses and explore neighborhood tax rates will provide a clearer financial picture when purchasing a home. Remember, while a mortgage payment might be a fixed monthly expense, these other costs can vary and should be accounted for in your long-term financial planning. When in doubt, ask your real estate profession at the Yosha Snyder Group. If they don’t know the answer, they will find it for you.