You’ve bought your first home and know you need to set aside money for things like AC checks, plumbing problems, and loose shingles. But how much? Here, reps from HomeLife Warranty Protection discuss home upkeep budgeting tactics.
Q: Thank you for lending us your time today.
HomeLife Warranty Protection: Gladly.
Q: With the New Year comes lots of new home sales. That means it’s time to start thinking about a home repair budget.
HomeLife Warranty Protection: Yes, it does, and there are a few general rules that can be applied to make sure you’ve got enough tucked away for maintenance costs.
Q: You mean there isn’t a set dollar amount?
HomeLife Warranty Protection: It isn’t quite that cut and dry. We suggest implementing the ‘1% rule.’
Q: 1% of what? Monthly income?
HomeLife Warranty Protection: 1% of your home’s value. For instance, if your house appraises at $175,000, you should have $1,750 put away to pay for repairs each year.
Q: What are some potential repair/upkeep costs to consider?
HomeLife Warranty Protection: HVAC service, which can range from $75 to $100 twice a year; mainline drain clearing at approximately $400 each instance; and service on items such as the roof, paint, and hot water heater.
Q: Are there other savings plans?
HomeLife Warranty Protection: Yes, another average budget is equal to $1 for each square foot of your home.
Q: Does that include outbuildings, garages, and unfinished spaces?
HomeLife Warranty Protection: It’s best to calculate using everything under a roof!
Q: Are there factors that might affect how much a homeowner should actually save?
HomeLife Warranty Protection: Age has the most influence on how much a home will cost to upkeep every year. A new home, for example, probably won’t have any repair costs the first year and every year after that may continue to increase the next five to ten years and beyond.
Q: How does the weather play a role in maintenance costs?
HomeLife Warranty Protection: Homeowners in temperate climates where termites thrive may want to save a little extra each month for an annual inspection. It’s better to pay an inspector once a year than to let it go and be out of pocket thousands of dollars for repairs.
Q: How can a homebuyer know if the home they are buying has been taken care of?
HomeLife Warranty Protection: Look for service records on major systems. The electrical panel, for example, will likely have a sticker on it if it’s been inspected in the last several years.
Q: Should condo-dwellers keep a maintenance budget?
HomeLife Warranty Protection: Absolutely, but they can save a little less since the HOA/building owner will be responsible for upkeep of the structure itself.
Q: Which of the savings rules is most accurate?
HomeLife Warranty Protection: It is best to use an average of both dollar amounts.
Q: Fair enough.
HomeLife Warranty Protection: Those with homes that might need additional upkeep should add 10% to their average.
Q: Before we close, do you have anything to add?
HomeLife Warranty Protection: Just that these are generalized rules and averages over a long period of time.
Q: So we shouldn’t expect to spend $2,000 every year?
HomeLife Warranty Protection: Not if you maintain your equipment correctly and have a home warranty in place to subsidize repair/replacement cost on those items that you’ve kept in good working order!
Q: Good advice! We appreciate your time today. Before close, how can our readers get in touch with HomeLife Warranty Protection?
HomeLife Warranty Protection: Through our website, HLWP.co