One of the biggest mistakes that we see homeowners make is in planning out how much money they’ll need to set aside for upkeep. Your house is a major investment, but it’s also subject to entropy, just like all of us. Without consistent upgrades and upkeep, it will depreciate in value each year.
Much of this you can prevent by setting up a maintenance schedule and being proactive in halting problems before they snowball. For example, regular inspections of the plumbing and heating system will prevent costly accidents and dangerous situations. Proper maintenance of your yard and roof will prevent unsightly signs of disrepair. And of course, steady upgrades to your home as years go by will keep it from becoming outdated and difficult to sell.
However, all of these things cost money, and even major repairs won’t always be covered by your homeowner’s insurance. So it’s important for homeowners to plan and budget for a home maintenance account.
Replacing Appliances and Systems
Not everyone’s home maintenance budget will be the same. Various factors will make your costs more or less expensive. For example, the frequency and cost of replacing major appliances and home systems will change according to your purchasing preferences. However, they’ll need to be replaced eventually, no matter what you do. A furnace usually lasts 10-20 years, a roof will need to be replaced every 15-20 years, and a bathtub wears down between 5 and 15 years. Most kitchen appliances like refrigerators, stove ranges, etc, will last about 10 years each.
All of these replacement costs can be expensive! However, if you’re able to space them out, they shouldn’t be too big of a stress.
There are other things that need more regular maintenance in order to keep them in good working order. This includes your flooring, the insulation in your walls, etc. Routine maintenance on your yard and regular checks by a pest control specialist or a plumber will help you to get a good, long life out of your house.
Upgrades to Keep Current
It’s also important to remember that beyond the baseline of repair and maintenance, you’ll also want to do upgrades every once in a while to keep your house looking great and to keep it competitive in the market, especially if you’re renting out the property. How much you end up paying for this will depend a lot on your preferences and situation. However, putting aside a healthy amount for it is recommended.
How Much to Budget
Exactly how much you need to budget for maintenance and repairs will depend on how old your home is, what kind of a climate you’re in, how hard you are on the house (which depends on how many people are in there, whether you have children and dogs, and whether you live there yourself or you have tenants.)
However, there are a couple rules of thumb that will help you plan:
The 1% rule says that each year, you should plan to pay around 1% of the value of your home in repairs and maintenance. So, for example, if your home was $400,000, you should put aside $4,000 each year for upkeep. This, of course, is an average number. Some years will cost you less and some will cost you more, so it’s wise to give yourself a good cushion, and just re-invest the extra amount each time it’s available. The benefit of this calculating method is that the property rates around your area will probably be reflected by the costs of service, materials and repair in relation to other areas in the country.
There’s another rule that some homeowners use to calculate expenses called the square foot rule. In this one, you calculate the cost of maintenance according to the size of your home. You should appoint $1 per square foot per year. So, in a house of 3,000 square feet, budget for $3,000 in repairs each year. This helps you factor in the idea that the more house you have, the more maintenance and repairs will cost.