Creating a home maintenance budget is frightening if you anticipate buying a home. Most people get carried away with having a new home without considering the maintenance. You may fantasize about getting the keys and moving into a place you can call your own if you have been planning toward it for some time.
Although positive changes come with a lot of responsibility, maintaining, and repairing your home may be expensive. Before signing a contract for your new home, it’s important to consider the fees and costs that come with it.
Homeownership comes with more costs than the mortgage, utilities, and taxes. Unfortunately, many parts of your house have a limited lifespan. You need to prepare for breaks and replacements by yourself or you can call a home maintenance service for those repairs.
However, how do you decide how much money to spend on home repairs? An excellent place to start is with the 1% rule of thumb. To do this, 1% of the home’s purchase price must be set aside for maintenance and replacement costs.
That maxim might not apply to everyone, though. How much you need to set aside for repairs also depends on other factors, including the age and condition of the house.
How to Start your Home Maintenance Budget
Start by creating a list of all the home maintenance tasks you might need in the future. Remember that it involves more than just significant projects like renewing your rugs or sealing your attic. Consider more specific activities like replacing light bulbs, patching little cracks in the walls, and other simple things you may forget.
Remember to include any home maintenance tasks you would like to complete, but they can be done after a while. This can entail changing the doorknobs, putting in hardwood flooring, or painting a wall a striking color.
Your list may seem long at first because you need to do a lot of little things to keep your home safe and comfortable. Nevertheless, don’t worry; you’re writing a list for a reason; you can plan financially and cross things off as you finish them.
How much to budget for Home Maintenance Annually or Monthly
Putting a list of items in your monthly budget for property maintenance is important so that you can regularly put money aside for it. How much money should you allocate?
Most people think that annual home maintenance costs range from 1% to 4% of the property’s value. Therefore, if your house is worth $400,000, your average maintenance cost will range from $4,000 to $16,000 per year or $334 to $1,333 per month.
Obviously, that covers a vast range. The easiest way to determine how much you would need to set aside is to consider the age and state of your home.
Imagine that when you purchase your home, it is quite new and well-maintained. In that situation, you might get away with paying only 1% of your property’s value on maintenance. But if your house is old and has many outdated systems, like an old heater and worn-out appliances, you should set aside 4% of the value of your property each year for repairs.
You should typically choose the midpoint of that range and expect your yearly maintenance costs to be 2% to 3% of the home value if it is neither extremely old nor new. In addition, you can choose a number based on the size or state of your home. 3% might be a better option for a larger house with lots of land or space in the compound.