Many aspiring homeowners get caught up in the cost of buying a home. However, the price of the property is just the beginning. The cost of maintaining a home is also an important consideration, and it can be unpredictable. Some maintenance costs occur on a routine schedule, while others arise suddenly. To get a sense of how much you should budget to maintain a property and preserve its value, you’ll need to understand the items that contribute to maintenance costs and explore some common methods for forecasting a home’s annual maintenance costs.
The Cost of Maintaining a Home
What Factors Impact Maintenance Costs?
Numerous factors affect the cost of maintaining a home, and some of them may surprise you. NerdWallet recommends weighing the following items when trying to determine what your annual maintenance costs are likely to be:
- The Age of Your Property: Roofs, windows, carpets, mechanical systems, and other components of your home will wear out over time. As a result, older homes generally need more work, so if your home has been around for quite a while, you will probably need a bigger maintenance budget.
- The Quality of the Materials and the Workmanship Used to Construct Your Home: Homes built with top-notch care and solid craftsmanship tend to hold up better and need work less frequently than homes where lesser materials and inferior work were used.
- Your Home’s General Condition: Your home’s maintenance history can have a major impact on the amount of maintenance it’s likely to require. An older home that has been loving maintained may be in better condition than a newer one that has suffered through a period of neglect.
- Your Location: Homes routinely exposed to crushing cold or melting heat are likely to suffer more wear and tear and require more maintenance. On a similar note, properties that are frequently in the path of severe weather face a higher risk of needing repairs.
- Your Location’s Market: Repairs and replacements will hit your wallet harder in high-cost markets where demand drives up the price tags on materials and services.
- Your Handiness: When it’s done right, doing something yourself can reduce costs. However, tackling home projects that are beyond your skill level can ultimately cost you more.
Tricks for Estimating Annual Maintenance Costs
There’s no way to know exactly how much your annual maintenance costs will be, but as The Balance points out, there are several methods you can use to get a rough idea:
- The 1% Rule: Experts often suggest setting aside at least 1% of your home’s purchase price each year for maintenance costs. This method does reflect the overall market forces in your area in that higher cost areas are likely to have higher labor and material costs. However, it doesn’t account for the age or condition of the house, nor does it take into consideration whether you bought the house when the market was high or managed to snag a great deal.
- The Square Foot Rule: With this method, you set aside $1 for every square foot of space in your home. This seems reasonable since a bigger home will likely have higher maintenance bills, but it doesn’t allow for fluctuations in the cost of labor and materials from one place to the next.
- A Custom Approach: A mix of methods tailored to your situation may allow you to estimate your maintenance costs more accurately. Consider determining what your likely costs would be if you followed the 1% rule and the square foot rule. Then, average the numbers. Finally, consider the factors that are likely to increase your maintenance costs like age, weather, condition, and location. Add 10% of your average to the total for each factor that is relevant to your situation for a customized estimate.
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