First-time home buyers rarely have the experience to properly calculate all the expenses they need to budget for. They often only factor in the closing costs and a few extra thousand for immediate repairs. But if you own a home, you can bet that there will be annual repair and maintenance needs every year. So, you’ll also need to factor in the big-ticket items that need to be replaced eventually, such as the roof and furnace.
Here are some tips on how to budget for home maintenance costs, both big and small.
How to Budget for Routine Maintenance
The rule of thumb is that you need to put aside one percent of your purchase price per year to cover any of the maintenance costs that occur. For a $500,000 house, you’ll need to put away $5,000 per year for routine repair and maintenance. With that in mind, what will your standard budget cover? Here are some examples:
- Gutter cleaning and repair
- Plumbing and faucet repair
- Roof repair (leaks, damaged shingles, loose flashings, etc.)
- Re-insulating the pipes and attic
- Heater repair and replacement
- Furnace and sump pump installation and repair
- Window maintenance
- Driveway repair and replacement
- Repainting the interior and exterior
- Garage door repair
- Exterior door and storm door replacement
- Chimney maintenance and cleaning
- Floor cleaning and repair
- Appliance repair and replacement
- Cleaning costs (power washing, equipment, supplies, etc. )
- New supplies (garden hoses, batteries, etc.)
- Emergency repairs
How to Budget for Big Projects
Don’t forget to also budget for big-ticket items like structural repairs, roof and window replacements, and otherwise. The age of your home and the warranties in place can help you determine how much you will need to budget for. As a general guide, if you own a home between five and 20 years of age, an annual budget of three percent should suffice. For older properties, a budget of four to five percent may be in order depending on what systems are coming up for replacement.
What big projects should this budget cover? Here are some examples:
Most roof systems will last upwards of 20 years, some even longer. However, you’ll still need to start budgeting for this the day you move in, as the replacement costs can vary between $8,000 and $30,000 depending on the size, pitch and roofing materials. There will also come a time when you need new gutter systems, which can set you back thousands of dollars. So don’t forget to factor this into the budget that you set.
Replacing old windows with updated modern ones can cost you between $10,000 and $30,000 depending on the size and style of your home. Most window systems last 15 years or longer, but you may want to replace them sooner to take advantage of the latest energy-saving window technology available.
Foundation issues can also be costly to repair. Simple cracks can be taken care of by your standard maintenance budget, but waterproofing and structural repairs should be factored in with the other big-ticket items.
Vinyl siding, brick pointing, and new concrete costs can add up quickly. Even a new asphalt driveway or flooring can be required every five to ten years, so make sure you budget properly for it.
Having a proper maintenance budget is just a standard part of owning a home. Let us help you manage the budget and repairs for your rental so you won’t have to worry about it. Contact us at CLV Group and InterRent REIT to find out more.