Creating a Home Maintenance BUDGET....

Dated: January 21 2021

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Owning your home is one of your greatest achievements. It feels great and

fulfilling—until you've got a leaky faucet. Or the paint all over your walls is

 peeling. Or the gutters are clogged. 

How Much Should You Set Aside For Home Maintenance? Factors To Consider In Creating A Budget

Doing home maintenance and repairs can be daunting. But there isn't a house

with walls you never have to repaint or roof that you never have to replace. 

And when your home is your biggest financial asset, maintaining it is a must. 

This is why you need to set aside money to take care of regular home 

maintenance and repairs. And no, it shouldn’t be your emergency fund, but a 

specific budget allocated for routine repairs and even unforeseen ones so you

can keep your home in tiptop shape.

Figuring out how much money you will need to save for home maintenance is also 

crucial if you’re a first-time buyer. Maintenance and repair costs are one of the hidden

expenses of buying a home—one thing you need to consider when figuring out how 

much mortgage you can afford.

 

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Home maintenance is non-negotiable. You have to perform maintenance on 

your property in order to prevent deterioration and slow down its general wear 

and tear. On the other hand, a renovation or upgrade is being done to improve 

or change an aspect of your home. 

Your home maintenance budget should be used primarily on routine upkeep,

 small repairs and fixes, and prevention of bigger problems. Examples of 

maintenance work include:

  • mowing the lawn, treating grass, and pruning trees,

  • fixing leaky faucets,

  • cleaning out gutters and vents,

  • replacing HVAC filters,

  • cleaning the windows and siding,

  • power-washing your deck or patio,

  • cleaning your dryer ducts,

  • repainting walls,

  • inspecting your fire extinguishers,

  • oiling door hinges, etc.

While larger projects such as remodelling a kitchen or a bathroom fall under

 home renovation, there are times when there might be some overlap. For example, 

if there's a need to replace a leaky faucet, you’d be better off upgrading it to a nicer 

fixture when getting the job done.

 

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So how much should you set aside for home maintenance? While we will 

discuss the factors that can impact your budget later on, there are two most

 popular rules that you could follow when planning for maintenance costs.

First is the 1% rule, which says that you should set aside 1% of the purchase 

price of your home for ongoing maintenance. So if your home costs $300,000,

 you should budget $3,000 per year. However, this rule has its limitations since

 market conditions impact home prices. Not to mention that it doesn't take into

 consideration the general condition of the property when you purchased it. This 

rule just gives you a safe estimate of how much you should have as maintenance 

savings. 

Another popular rule is the square footage rule, where experts recommend to 

budget $1 per square foot, per year. It’s a practical estimate and slightly more

 consistent than the 1% rule since it’s directly related to the size of your home, 

and your square footage doesn’t change. This means if you live in a 3,000-

square-foot home, your annual home maintenance budget would be $3,000. 

However, this rule also doesn’t take into account the many factors that could 

further affect your maintenance and repair budget.

 

 

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So what are the factors to consider when setting up a home maintenance

 budget? 

Here's the list:

 

1. Age and condition of the home

a drawing of a faceThe range of your actual maintenance costs may depend largely on

the age and condition of your home. Older homes, specifically those that were built

10 to 20 years ago, generally require more work to maintain compared to homes

that were built within the past decade. They're also likely to need major structural,

electrical, roofing, or plumbing upgrades to keep the home up to code. If your home

is less than five years old, or if it has been recently renovated, you might be able to

budget less for maintenance and repairs for the first few years since most of your

home’s appliances, materials, fixtures, and finishes are still new and in good working 

condition. The 1% rule could be your appropriate range if you have a newer home, 

but it could go as high as 3-4% for older homes.

If you bought a new construction from a builder, you may even have an overall 

warranty or warranties on individual items in your property. While the warranties 

are still in effect, it could potentially reduce the amount you should save. However,

don’t think that a new construction home is maintenance-free. Proactively taking

care of your home, even if it’s new, can help you avoid future bigger problems.

 

2. Home size or square footage

a drawing of a faceAnother general rule is that the bigger your house and lot, the higher your 

maintenance costs. A bigger property, such as a single-family home in the suburbs,

requires more upkeep than a small condo in the city or a tiny home, regardless of 

how much the house is worth. A larger home comes with more room and space to 

maintain, both in the interior and exterior parts of the home.

 

3. The weather or environment and location

a drawing of a faceWeather plays a big role in how your maintenance can be affected. Snow,

ice, temperature, humidity, sun exposure, rain damage, wind damage, and other wear

and tear issues brought on by the local weather will impact the upkeep and repairs 

your home will need. If you live in a region with harsh winters, you might need to 

save more on snow removal costs. Homes in coastal areas that are often affected

by storms might have a greater need for paint and roofing upkeep. Likewise, homes

in humid regions are more prone to mold and mildew.

It's also a different scenario if your home is located in a hurricane-prone area or in 

areas where there’s regular flooding. If your home is situated adjacent to a flood

plain, your basement is at higher risk of water damage. These environmental and

topographical variables should also be considered when setting up a home 

maintenance budget.

 

4. Building materials

a drawing of a faceThe cost needed to maintain your home may also depend on the building materials

used. Some materials will require more or less upkeep than others, and there are

some that are more prone to damage.

 

5. Your family size

a drawing of a faceThe more people are living in a household, the greater the chance of wear and tear,

especially if there are small children. In this case, there might be a more frequent 

need for minimal touch-ups and repairs, which should also be considered when 

creating a budget.

 

Bottom line

Proper maintenance and upkeep will help preserve your home's value and put you

ahead of the game once you decide to sell. The key is to be proactive right from

day one, rather than just relying on your emergency fund when things have already 

gone wrong in your home. By setting aside small, manageable amounts of money 

on a regular basis, you’ll be less likely to sink a large chunk of cash to cover for any

unforeseen repairs, especially if you will need to pay a handyman to do the job. 

Best Regards,

Georgie



Blog author image

Georgieann Elliott

An entrepreneur real-estate professional living and working in Northern Utah. Experienced with buyers, sellers and investors. Many hours of service are devoted working with Seniors. The Seniors Real E....

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