How much you will need to spend on home maintenance cost is a crucial thing to know when figuring out what you can afford when taking out a mortgage to buy a house. This cost is one that many potential homeowners pay shockingly little or no attention to.
Too many homeowners take a casual approach to budgeting for home repairs, figuring they can tighten their belts when the occasional expenses arise, such as replacing the dishwasher, or they plan to borrow money for major expenses like replacing the roof or septic field. That can lead to disaster, particularly in today’s credit market, when you can no longer count on simply tapping a home equity loan scheme to cover major repairs.
Unlike renters, homeowners have a vested interest in maintaining the property so it’s important to plan for annual check ups as well as unexpected surprises like a broken appliance or a leaky roof. Find out what maintenance tasks you may have to perform each year. Here are a few tips for creating your own home maintenance cost budget.
Build a reserve
Set aside 1% to 3% of your home’s purchase price every single year into a separate savings account, which is designed specifically for home maintenance cost and repairs. For example, if your home costs $1,000,000, set aside at least $10,000 each year. Make one large deposit or spread the amount out in monthly deposits, but make sure you plan for this!
Assess your needs
You have to prioritize projects and work within your budget. The new hot-tub or pool might be less important than updating some old, drafty windows. If you have the money, increase your budget as needed for bigger projects which mean bigger expenses.
Minimize gas and electricity costs by using energy efficient appliances, light bulbs, and updated windows.
Do it yourself
Depending on how handy you are with a hammer or a drill, consider doing minor repairs around the house yourself. And last but not least,
Use credit wisely
Do not use credit loaned for house repairs that are of minimal importance. Arrange your repairs according to levels of priority, and invest out the credit accordingly.
There you have it! The gospel of home maintenance costs and how best to prepare for them. If you are a home owner or a real estate agent, you need to be not only acquainted with these tips, but be sure you know them well enough to teach- because without them, you may find yourself up a creek without a paddle!