When you’re looking for ways to save money, you may initially focus on the small stuff. While sticking to a budget for your weekly grocery list and cutting down on your energy expenses can give you some of the savings you’re searching for, many homeowners may want to consider a much bigger penny-pinching change: moving to a city with lower property taxes.
Luckily, a recent report from personal finance website GoBankingRates studied 200 of the largest cities in the U.S. and determined the top 30 cities that fell in the sweet spot of low taxes and affordable homes. The study found these cities by looking at the area’s median home values and tax rates at a state and local level. These tax rates included income, sales and use tax rates, and property taxes as a percentage of market value. They used data from the Census Bureau’s 2017 American Community Survey as well as Zillow in order to find these numbers.
Top Ten Cities For Home Buyers
Perhaps unsurprisingly, seven out of the ten top cities for home buyers were in states that don’t charge a personal income tax rate. Although income taxes make up about half of federal revenue, or $1.688 trillion, states like Florida and Nevada don’t charge these to their residents. This gives them a significant leg up in the ratings.
In fact, Florida had a total of three spots in the top ten list. The lack of personal income tax combined with a low cost of living and favorable property taxes may be able to convince the residents of the 42.58 million housing units occupied by renters in the U.S. to take the plunge into homeownership in the Sunshine State. For those who don’t prefer the humid climate of the Southern United States, the list still includes cities that span from coast to coast.
Without further ado, here are the top ten cities in the United States for home buyers looking for a money-saving steal:
- Hialeah, Florida
- St. Petersburg, Florida
- North Las Vegas, Nevada
- Fremont, California
- Jersey City, New Jersey
- Tampa, Florida
- Reno, Nevada
- Las Vegas, Nevada
- Dallas, Texas
- Salt Lake City, Utah
Taking the lowest spot on the report’s ranking is Rochester, New York, where there is a whopping 3.4% property tax rate. For comparison, the national average is sitting at 1% for property tax rates. The expensive homes in Rochester that aren’t appreciating in value don’t help the city’s ranking either.
Additional Cost Factors Home Buyers Are Considering
Property taxes will certainly have an impact on the amount of money you’re spending as a result of your home’s location and a report like this is crucial in knowing which city will give you your money’s worth in regards to taxes. However, there are several other finance-focused factors that will make or break your money-saving efforts.
A major one is the size and layout of the home. You may dream of a large house with four bedrooms and three bathrooms all to yourself, but that is going to make your heating bills skyrocket while impacting your taxes as well. On the flip side, buying a home that is too small for a family with potential to grow could mean that you’ll be facing costs to remodel and add on rooms in the near future.
Additionally, being prepared for everything will certainly help save some cash since there is always going to be some costly expense you have to be ready for. Roughly 25% of homes in the U.S. use a septic system, which, a standard or conventional gravity system for a 3-bedroom home on a level site with good soil would likely cost from $1,500 to upward of $4,000.
Your commute to work should also be a primary factor when choosing your new home’s location to save money. The average American commuter wastes 42 hours in traffic every year, resulting in a cost of $1,400 in gas, according to a report from data company Inrix. By finding a home that is only a short commute from your workplace, your children’s school, and other locations you often visit, you can save major bucks on gas.
Consider the amount of lighting in the house as well. If you purchase a home that gets plenty of natural light, you’ll be able to save on your electricity costs during the day. You may want to consider making a one-time investment in window tints as they can save you up to 40% on your utility bill by blocking the warmth of the sun while still letting in light. Not only will this natural light lower your dependence on indoor lamps and lightbulbs, but you’ll feel the mental rejuvenation of the sun’s rays as well.
Many people will spend almost anything on something that they desperately want. Beauty gurus will spend hundreds on the latest makeup palette, tech-lovers will dedicate whole paychecks to the latest gadgets, and 47% of hair loss sufferers even reported that they would spend their entire life savings in order to have a full head of hair again. While owning a home is a dream for many Americans, you don’t have to empty your bank account in order to do so. By thoroughly researching your desired area and taking a hard look at factors like property taxes and commute times, you’ll be able to find your perfect — and affordable — home.