How Much Should You Budget for Home Maintenance?

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What could be more delightful than having a home ownership? Of course, it is the biggest investment we ever make in our lifetime. But there are plenty of things to consider when purchasing a home. For example annual cost of home maintenance, repairs etc.

Why is it so important to maintain the annual maintenance cost budget?
Home investment is already pricey deal and additional cost can be a big load on your financial situations. Top real estate brokers say It's impossible to predict exactly what your home will need as there are chances of hidden cost involvement too. And hidden or additional cost attached to home ownership can break your bank if not analyzed properly.

How much money should you spend on home maintenance?
It is one of the difficult questions to answer that how much money you should budget for home maintenance and repairs. There are a couple of top real estate agents in USA that can help guide this calculation. These measures are based on average home condition and plenty of other factors which can vary from your current home condition. So you may need to adjust these steps according to your general condition of home etc.

The 1 Percent Rule of Thumb
According to the top real estate brokers that one percent of the purchase price of the house should be kept separately each year for ongoing maintenance. For example, if your home cost $450,000, you should keep the budget $4,500 for annual maintenance of your home. However, this reserve doesn’t mean that you should spend $4,500 every year. The maintenance cost may vary from year to years. For example, a roof replacement is the biggest maintenance than average maintenance and repairs which could cost around $10,000 or more. But these types of maintenance are not included in current maintenance. So in next year maintenance cost can be less. Maintenance cost is also impacted by the cost of labor and materials in your particular geographic area.

The Square Foot Rule of Thumb
You should budget $1 per square foot per year for maintenance and repair costs is another essential tip given by top realtors.  If you have a 2,000-square-foot home, for example, budget $2,000 a year for maintenance and repairs. It is a more accurate way to evaluate home maintenance cost however it also has some downsides. For example, it doesn’t account for labor and material costs in your area. The market prices for contractors, labor, and building materials can be different significantly from region to region.

Adding Operating Costs: few homeowners also add ongoing home operating costs such as electricity, gas, water etc with home maintenance and repairs.  
However, apart from these, there are plenty of other factors need to consider which can impact on the cost of maintenance and repairs for a specific house.

Age: home age matter a lot and each real estate agents emphasis on home age. A new home constructed in last 5 to 10 years will need very little maintenance, while homes 10 to 20 years old will need slightly more.

Location: Homes located in the areas that create environmental stresses will also impact the amount of care and maintenance it needs.

Single-Family vs. Attached:  A single-family home needs a larger maintenance budget. On the other side, a condo or townhome won’t need as hefty of a maintenance budget since exterior maintenance is included in the HOA fee (although HOAs may require additional payments for specific upkeep projects).

According to the top real estate brokers, several home buyers in USA have different ways to analyze the home maintenance cost. Here we are sharing few basic steps to analyze home maintenance cost:-
  • Calculate approximately the replacement cost
  • find out the life expectancy
  • find out the current age of each item
  • analyze the estimated remaining life expectancy
  • Rank the house components in order of increasing estimated remaining life expectancy and then plan for any expenses expected in the next five years.
Location: San Marino

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