What Are Routine House Maintenance Costs And How Do I Budget For Them?

When you buy a home, one of the most important (but maybe not the most fun) parts of the journey is budgeting for a variety of costs. From inspections to appraisals to down payments and more, you likely planned out a pretty comprehensive budget during your home search. One cost that many home buyers don't think about is the maintenance that will be needed on the new house once they move in. Budgeting for home maintenance costs should always be top of mind and if you've never owned a home, it’s probably more costly than you realize.

Budgeting for something that doesn't have a predictable and relatively fixed cost can be tricky. Luckily, there are some rules of thumb that can help you estimate how much you should save each month for home maintenance expenses.

The 1% – 4% Rule

Generally speaking, you should expect to spend 1% – 4% of your home's value each year for maintenance. So, if the cost of your home is $250,000, you should probably save anywhere between $2,500 to $10,000 to spend on annual upkeep. Why such a broad range? Well, new and smaller homes tend to be toward the low end, while older and larger homes run higher. Let’s dive a little deeper into this.

The Square Footage Rule

Another way to approach home maintenance costs is to calculate in relation to the overall square footage of the home. The calculation is pretty straightforward, as you can put away about $1 for every square foot of livable space, every year, for annual home maintenance costs. So, a 1,500-square-foot home would require a $1,500 budget annually, or about $125 per month. Keep in mind, using this method to determine home maintenance costs does not take into account the age, size or condition of the home, which are factors that can really drive up (or down) the cost.

Ask The Seller

Nobody knows a house better than the people who live in it. Use this to your advantage by asking the seller how much they spend on maintenance, and adjust your budget accordingly. Usually sellers are happy to provide this info.

Things like new additions, redone kitchens and bathrooms and that hot tub you’ve been eyeing online don’t fall into the category of routine home maintenance. Let’s take a look at a few of the tasks/costs that DO fall into this category and why they are important to address.

• Lawn care: Having a pretty lawn and garden is nice to look at, but more importantly it can be a good way to ensure vegetation and water don't get too close to the house where they can cause damage.
• Exterior cleaning: Keeping the outside of the house clean makes the siding last longer
• Driveway sealcoating: Keeping up on cracks by filling and coating them can prevent larger issues that occur when they are left unattended.
• Plumbing issues: A critical component of a functioning home, plumbing issues should always be addressed immediately.
• Gutter cleaning and repair: Keep the rain from seeping into your foundation by making sure those gutters are clear of debris.
• Replacing filters: Especially the furnace filter, which ensures your home heating and cooling is working at maximum power and efficiency.
• Repainting walls: Cracks and chips are an eyesore and can bring down the sale price when you’re ready to move.
• Servicing kitchen appliances: Depending on their age and use, your appliances may need some tune-ups now and then.

Those routine maintenance items are only part of the equation when it comes to budgeting for home care. The other category to think about is major repairs. Things like getting a new roof or replacing all of the siding on your home can mean a big hit to your wallet, so be prepared. One way to estimate when these things will need to be done is learning when major repairs were previously made. If the roof is only 5 years old, you will be good for a while. If it’s 25 years old, it may be time to replace it soon. Find out when major repairs were done and how long the item in question is estimated to have a useful life. Be sure to find out if previous repairs have warranties attached to them as well. This may help with all or at least some of the cost to replace or repair.

Budgeting 1% of your home’s value for repairs is a starting point, but you should add or deduct funds for a variety of factors. Let’s take a closer look at some things that could make that budget contract or expand.

Weather

Did you buy a home in the upper peninsula of Michigan? Oh, the beautiful scenery! Keep in mind though the harsh winters can do a number on your home, so that roof might need to be replaced sooner than later. Found your dream home deep in the heart of Texas? That air-conditioner is going to be working overtime in the summer months. Think about the specific weather in your location and if it’s extremely cold, extremely hot or maybe in a storm-prone area, add a point to that budget. 

Homeowner Skill

Are you a skilled DYI homeowner? Bring that budget down a point. Not so handy? Add a point.

Use Of Home

If you live alone or with just one other adult, the wear and tear on the home is going to be pretty minimal, so subtract a point. Prefer a house full of kids and pets? That means more daily impact on the home, so add a point.

Age And Condition Of The Home

No surprise here, as older homes will require more repairs that will pop up sooner. Deduct a point if your home is less than 10 years old or if you received a home warranty at the time of sale. Add a point for homes older than 20 years and add two points if you are buying a home as-is (no inspection). Keep in mind that the Seller’s Disclosures and the home inspection (if you have one) should help you get a clearer picture of the home’s condition before you buy it.

Proximity To Hazards

Geographical hazards, like floodplains, or environmental circumstances, like air salinity, can require additional maintenance. Add a point if you live in or near any of these types of hazards.

Now let’s take a look at a few of the top strategies for saving for home maintenance costs you can employ now that you have a better idea of what things cost.

Home Warranty

Purchasing a home warranty – or better yet, having the seller buy you one – can help cover some of the costs when things break down. Also, be sure you understand what is and isn't covered when it comes to home warranty costs. 

Put a Little Bit Aside Each Paycheck

Now that you know the yearly estimated home maintenance costs, divide that by the number of paychecks you get each year and put that amount away each time you get paid.

Improve Those DIY Skills

Even if you don't consider yourself handy, YouTube videos and other resources are a great way to up your home maintenance game so you don't have to pay the labor costs for each and every item that pops up.

Home maintenance isn't the most exciting thing to budget for, but you’ll be glad you did when things are ready for repair. Prepare and budget when you are considering buying a home so you have a good idea of the total financial burden you are facing before you get to the closing table. Also, check out more tips on home ownership and never stop learning!