The House That Costs You More Than It Gives: Hidden Costs of Homeownership No One Tells You About

Introduction: The Dream of Ownership and the Bitter Reality

Owning a home... This dream that haunts every young person and every family seeking stability. In our Arab and specifically Saudi culture, owning a house is considered a sign of success, independence, and maturity. But what if this dream hides an endless financial nightmare? What if the house you dream of takes more from you than it gives?

In this article, we'll lift the curtain on truths that real estate agents, banks, and even those who preceded you in the experience don't tell you. We'll review global studies and shocking statistics, connecting them to our reality in Saudi Arabia. The goal isn't to discourage you from ownership, but to arm you with knowledge for making an informed decision.

First: The House Poor Phenomenon - When Home Becomes Financial Prison

The term "House Poor" describes a globally widespread phenomenon where someone owns a beautiful home but can barely cover their other expenses. Their salary goes to installments, bills, and maintenance, leaving nothing for savings or enjoying life.

Signs of Being House Poor

According to American financial studies, several clear signs appear on someone suffering from this phenomenon. First, spending more than 30% of income on housing, which financial experts consider a red line. Second, inability to build an emergency fund, as everything that comes in goes out immediately. Third, stopping contributions to retirement or future savings. Fourth, having to borrow to cover emergency maintenance expenses. Finally, constant financial anxiety and psychological pressure due to obligations.

Shocking Statistic

A survey conducted by Quicken Loans in early 2024 revealed that more than 37% of American homeowners spend beyond their means on housing costs. This means more than a third of owners live in constant financial pressure due to their home purchase decision.

Second: Hidden Costs That Shock You After Purchase

The listed price of a house is just the tip of the iceberg. There are huge costs that only appear after you receive the keys and start living in your new home.

Global Numbers

According to Bankrate's 2025 study, the average annual hidden costs of homeownership in America is $21,400, equivalent to approximately 80,000 Saudi Riyals annually. This amount is distributed as follows: maintenance and repairs consume about $8,808 annually, followed by energy and utility bills at $4,494, property taxes at $4,316, home insurance at $2,267, and internet/cable at $1,515.

Zillow and Thumbtack Study

In November 2025, Zillow in collaboration with Thumbtack released a study revealing that hidden ownership costs rose to $15,979 annually as a national average. These costs increased by 4.7% compared to the previous year, while household incomes rose only 3.8%. This means the gap is widening and pressure increasing.

In Major Cities It's Worse

In New York, hidden costs reach $24,381 annually, in San Francisco $22,781, and in Boston $21,320. These numbers make many reconsider the feasibility of ownership versus renting.

Third: Hidden Costs in the Saudi Context

In Saudi Arabia, the situation differs in some ways and is similar in others. There are no property taxes like in the West, but there are other costs that are equally burdensome.

Electricity Bills

The hot climate makes electricity bills a heavy burden. The cost of running air conditioners in summer can reach thousands of riyals monthly, especially for large villas. Some families pay 3,000 to 5,000 riyals monthly in summer for electricity alone. Throughout the year, electricity bills may exceed 25,000 riyals.

AC Maintenance

Central air conditioners need costly periodic maintenance. Annual routine maintenance starts from 5,000 riyals, duct cleaning starts from 3,000 riyals, and repairs start from 1,500 riyals per issue. If you need to replace a central unit, the bill may reach 25,000 riyals or more.

Plumbing and Electrical Maintenance

Water leaks, clogged drains, electrical wiring problems... all common issues especially in older homes. Repair costs can reach tens of thousands of riyals if the problem is fundamental.

Renovation and Painting

Homes need periodic renovation every 5-10 years. Repainting a medium-sized house may cost 15,000 to 30,000 riyals. Comprehensive renovation of old homes can reach hundreds of thousands.

Shared Service Fees

In 2025, a new regulation was issued requiring unit owners in residential complexes to pay annual maintenance fees of up to 3% of the unit's market value, potentially rising to 7% for units exceeding 300,000 riyals in value.

Fourth: Robert Kiyosaki and the House as Liability Theory

Robert Kiyosaki, author of the famous book Rich Dad Poor Dad, sparked widespread controversy when he said your house is not an asset but a liability. This statement shocked many because it contradicts prevailing belief.

Kiyosaki's Logic

Kiyosaki defines an asset as something that puts money in your pocket, and a liability as something that takes money out of your pocket. By this definition, your home that you live in continuously takes money from you: mortgage installment, electricity and water bills, maintenance, insurance. It doesn't bring you a single riyal unless you sell it or rent part of it.

When Does a House Become an Asset?

According to Kiyosaki's philosophy, a house transforms from liability to asset only when it starts generating income. If you rent a room or annex or convert part of it into a small business, only then does the house start giving. Just living in it is a continuous cost.

Response to Kiyosaki

Of course there's another perspective. A house provides security and stability, and its value may rise over time building wealth long-term. But the point Kiyosaki raises is important: don't treat your house as an investment while bleeding financially for it.

Fifth: Psychological and Health Impact of Financial Pressure

The topic doesn't stop at numbers. Scientific studies show serious effects of ownership-related financial pressure on mental and physical health.

Scientific Studies

A study published by PMC found that people suffering from debt stress, including mortgages, are more prone to depression and anxiety. The study showed that 45% of elderly homeowners with mortgages spend more than 30% of their income on housing, directly affecting their ability to cover food and healthcare.

British Study

The Money and Mental Health Policy Institute revealed that 52% of homeowners suffering from mental health problems took drastic actions to maintain their payments, such as reducing food or using emergency savings. This compared to only 35% of those without mental health problems.

Impact on Relationships

Financial pressure is one of the biggest causes of marital problems. When all income goes to the house and nothing remains for entertainment or savings, relationships become tense and conflicts escalate. The house that was a symbol of stability becomes a source of tension.

Sixth: Buyer Regret Statistics

Recent numbers reveal that many homeowners regret their purchase decision, and the primary reason for regret is hidden costs.

Bankrate 2025 Survey

According to Bankrate's 2025 survey, 42% of homeowners with at least one regret reported that maintenance and hidden costs were higher than expected. This percentage rose from 40% in 2024, indicating the problem is worsening.

Real Estate Witch Survey

Another survey revealed that 69% of American homeowners have regrets about their purchase due to financial pressure. More concerningly, 59% of them couldn't cover an emergency repair of $5,000 without credit card debt.

Hippo 2024 Survey

Found that 83% of homeowners faced unexpected repairs in 2024, nearly double the 2023 rate of 46%. Also, 46% of them spent more than $5,000 on these unexpected repairs.

Seventh: Rent vs Buy - The Real Equation

The question many avoid: Is renting really throwing money away? Recent studies present a different picture.

Bankrate 2025 Study

Bankrate's study revealed that renting is cheaper than owning in all 50 major American cities in 2025. The average monthly payment for a median home is $2,768, while average rent is $2,000, a difference of $768 monthly or more than $9,000 annually.

The Five-Year Rule

Financial experts agree that ownership starts to financially outperform renting after at least 5 years of living in the same home. The reason is the high initial purchase costs (down payment, closing costs, moving costs) that need time to recover through property appreciation and equity building.

What About Saudi Arabia?

With the rent freeze decision in Riyadh for 5 years issued in 2025, renting has become a more stable and attractive option. The tenant knows exactly what they'll pay, while the owner may be surprised by unexpected costs at any time.

Eighth: Mortgage Financing and Additional Burden

In Saudi Arabia, the vast majority of home buyers rely on mortgage financing, adding another layer of costs and risks.

Current Situation

According to Saudi Central Bank data, residential mortgage financing recorded a 4% decline in May 2025 compared to the previous year. The average financing contract value dropped to 741,000 riyals. This reflects hesitation among potential buyers due to high installments and eroding purchasing power.

Interest Rates

Mortgage interest rates in Saudi banks currently range between 2.99% and 4.16%, depending on the bank and financing type. This means you'll pay hundreds of thousands of riyals in interest over the financing period that may extend to 30 years.

Calculation Example

Suppose buying a house worth 1 million riyals, with 10% down payment and 900,000 riyal financing for 25 years at 4%. The monthly installment would be about 4,750 riyals. Total payment over 25 years: 1,425,000 riyals, meaning you'll pay 525,000 riyals in interest alone! This is before calculating maintenance costs and bills.

Ninth: When Is Ownership the Right Decision?

Despite all the above, ownership isn't always wrong. There are circumstances where buying is a wise decision.

Indicators of Your Readiness for Ownership

First, having an emergency fund covering at least 6 months of your expenses, including installment and bills. Second, the monthly installment being less than 28% of your gross income, and total debts less than 36% of your income. Third, intending to stay in the home at least 5 years to recover purchase costs. Fourth, being psychologically and financially prepared for maintenance surprises. Fifth, having stable income and clear career future.

Questions to Ask Yourself

Can I pay 20% down payment without depleting my savings? Will I remain financially comfortable if bills rise or I need major repairs? Do I prefer stability in one place or need moving flexibility? Are there better investment opportunities for my money?

Tenth: Tips for Protection from Financial Trap

Before Buying

Calculate the true cost of ownership, not just the house price. Add 2-4% of the house value annually as maintenance budget. Don't buy at your budget's maximum, leave room for surprises. Request a comprehensive home inspection before buying to discover hidden problems. Ask the seller about average electricity and water bills.

After Buying

Set a monthly budget for periodic maintenance to avoid costly disasters. Do preventive maintenance, as fixing a small leak is much cheaper than repairing water damage. Review available insurance contracts and warranties. Learn some simple maintenance skills to save money.

If Already in Difficulty

Reassess your budget and look for expenses that can be reduced. Consider refinancing if interest rates have dropped. Consider renting a room or annex to generate additional income. In worst cases, selling the house and moving to a smaller one is better than drowning in debt.

Frequently Asked Questions

Is renting throwing money away?

This phrase is exaggerated. The renter gets housing and security without maintenance risks and hidden costs. The difference between rent and installment, if invested wisely, may build greater wealth than property appreciation in many cases.

How much should I allocate for maintenance annually?

The globally recognized rule is 1-4% of the house value annually. In Saudi Arabia, due to high AC costs, you may need the higher end of this range.

Is the Real Estate Balance Platform a good opportunity?

Yes, for those who actually intend to live there. But remember that even with the reduced price, you'll still face future construction and maintenance costs.

What if I can't pay 20% down payment?

You can buy with a smaller down payment, but this means higher monthly installment and more interest long-term. Waiting and saving may be a wiser decision.

Are new homes better for maintenance costs?

Usually yes in the early years. But new homes may be more expensive, and over time they'll need maintenance like others. The difference is that major problems (foundations, roofs, old plumbing) are less likely.

Conclusion

Owning a home may be a beautiful dream, but it requires eyes open to financial realities. A house that costs you more than it gives isn't a successful investment, but a burden that weighs on you and affects your quality of life and mental health. Hidden costs are real and exist, whether we acknowledge them or not.

Before you make the purchase decision, calculate everything: installment, bills, maintenance, emergency fund. If the numbers don't allow, renting isn't shameful or escaping responsibility. It's a smart financial decision in many cases. And if you decide to buy, buy with awareness and a realistic budget that leaves you room to breathe and live, not just financially survive.

Remember: your home should be a source of happiness and security, not a golden cage imprisoning you in endless financial anxiety.