What are hidden expenses?

Hidden expenses are those costs associated with an investment or purchase that are not immediately obvious or typically considered in the initial price. They can significantly reduce any profit or financial gain expected from the investment. For example, when owning a house, hidden expenses may include real estate agent commission, land and provincial transfer taxes, property taxes, lawyer fees, home inspection fees, home insurance, maintenance costs, and utilities. These extra charges can quickly add up, often consuming a large portion of the profit from the investment, such as in a home sale 1.