Perhaps the most exciting aspect of home ownership is altering your property to suit your tastes and needs. In America, the renovation rate for new homeowners is way up, increasing 4.5 percent over 2017. However, remodeling projects aren’t free; on average, homeowners spend between $2,000 and $4,000 on renovations – and when you spend on renovations, you have less cash available to spend on more sustainable activities for your home, like maintenance.
Home maintenance is much more important than home renovations, but because it is less flashy and exciting, many homeowners neglect to do it, let alone save for it. If you want to avoid unnecessary costs associated with broken-down appliances, fixtures and systems – and have more money available for fun remodeling projects – here’s how you can build a working budget for home maintenance.
Consider These Factors Affecting Your Home
Not all homes require the same home budget. Certain factors increase or decrease the minimum requirements for money you should have available to spend on maintenance and fixes. These factors include:
New-construction homes, as well as homes built five to 10 years ago, typically require very little maintenance investment because the structure is so new. Meanwhile, homes built 20-plus years ago often need major components replaced. In the past, construction guidelines were looser and materials were less well-understood, so older homes tend to include elements like galvanized plumbing or aluminum wiring that will need to be replaced soon.
Just because your home is a relatively recent build doesn’t mean you can immediately avoid saving money for maintenance. Age is only an sign of condition; if your five-year-old home in Detroit has signs of water damage around the sink, you’ll still need to pay for a DET faucet repair service to visit. You can use the inspection report you received during the home purchase process as a guide to your house’s condition, and you should try to get in contact with previous owners to better understand their attention to critical maintenance.
A region’s weather puts significant strain on certain aspects of a home’s health. For example, in Phoenix, roofs tend to degrade faster due to the hot, dry sun, but in Seattle, water damage is more likely to eat away at siding. You should be aware of how the weather in your area is affecting your home and how much damage from that weather will likely cost you.
Where in the world your home is located matters, but it also matters where your home is located in the landscape. For instance, if your home is at the bottom of a hill, it could suffer greater threats from water. If your home is in the middle of Tornado Alley, along the Gulf Coast or near a fault line, you should also be aware of it. Though home insurance will help you pay for some damages incurred from these threats, you should have a backup fund in case insurance falls flat.
Start Saving an Emergency Fund
Once you have researched and weighed the factors pertaining to your home, you can begin developing a home maintenance budget. Perhaps the most critical element of your budget is your emergency savings fund, which should be large enough to cover the costliest repair to your home.
Unfortunately, the most popular rules rarely help you factor in the age, condition, weather, and location of your home, but they are good starting points for first-time home maintenance savers:
You should save 1 percent of the purchase price per year
According to this popular rule, if your Miami home cost you $400,000, you should be setting aside $4,000 each year for maintenance. Likely, you won’t use up this amount every year, but the rollover will come in handy when something big breaks.
You should save $1 per square foot per year
This is another good piece of advice because it is easy to remember and adhere to. It does mean that homeowners in Utah (the state with the largest homes on average) will need to save more than homeowners in Hawaii, but it makes sense given that there is more property to protect.
Now that you have baseline savings, you need to fine tune your calculation to make it more applicable to your precise situation. First, you should take the average of the 1-percent rule and the square foot rule. Then, add 10 percent for each negative factor. For instance, if your home is old and is positioned in a harsh climate but seems in good condition and in a prime location, you would only need to increase your savings by 20 percent.
Budgeting for home maintenance isn’t rocket science. It takes only a small amount of calculation, but it requires a large amount of commitment. As long as you diligently save for maintenance – and more importantly, spend on maintenance tasks when necessary – you will keep your home healthy and happy for years to come.