Everyone wants his house property to look distinctive. We do a variety of things to give the best look to our property. It is crucial to allocate a budget for the annual cost of repair and upkeep of our property. However, it is not easy to judge the budget for home maintenance every year.
We notice the usual wearing of homes with weather changes. An ideal budget should also account for the upcoming weather conditions and your home’s location. For example, homes will wear differently in different locations, as the effects of temperature in Tel Aviv, Israel will be different from conditions in Washington, US on homes.
The home maintenance budget should consider the location, weather conditions, age of the property, etc. Still, few points are there to consider for arriving at an optimal cost of property maintenance.
Important Points for Preparing a Home Maintenance Budget
Let us see some of the key points to know about the cost of home maintenance.
1. Cost Range- 1%-4%
In general, the spending for the maintenance of your house property needs to be between 1-4 % of your property cost. So, if the property value is $100,000, your savings needs to be between $1000-$4000 on an annual basis for spending on maintenance.
The cost range is broader, and various factors need consideration including, property age and its location. A newly built home attracts less maintenance cost when compared to a home built 20, 40, or 60 years back. The maintenance cost is higher if your home is in an area that experiences extreme climate. However, for residential areas having moderate climate, maintenance cost is lower.
2. The Square Footage Method
The cost of maintenance also depends upon the length and breadth of your property. If the square foot area of your property is large, maintenance cost becomes higher than a small property. One more way to allocate the maintenance budget will be the cost per foot. For example, if you have a 1500 square feet property, you budget $1 per foot, the maintenance cost will come to $1500 per year.
The property age and location factors do not come into the picture while using the square foot method. Hence when using this method, you can arrive at the number in your mind. And plan to save that amount for the yearly maintenance.
3. Home Maintenance and Major Repairs are Separate
Talking about allocating a budget for the property maintenance and its repair means using the funds for upkeeping and fixing any general wear and tear. The following makes part of this repair and maintenance.
- Side cleaning
- Lawn relocation or grass treatment
- Deck or patio power-wash
- Vents and drainage cleaning
- Servicing of laundry and kitchen appliances
- Replacement of filter from AC and heating units
- Repair of leaky faucets
- Rusted fixture swapping
- Driveway seal coating
Major repairs like foundation repair, remediating mold, and replacement of water heater or even a roof, will cost you more. Hence when you become an owner of a house property, you need to have a healthy bank account. It will become convenient for you to spend on any unexpected maintenance for your property beyond general repairs.
So, what is the ideal budget to allocate for general maintenance and repair every year?
There is no specific answer for it. Depending on various factors, you can arrive at an amount and save it in your bank account as maintenance costs. Let us say, as per your calculation, the cost of maintenance will come to $6000. So, every month you will have to save $500 in your bank account. You may also want to keep an additional $6000 for any substantial repair of your house.
4. Be Aware of How Much Money to Spend for Maintaining a Property
When you decide to buy your own home, it is not correct to consider only the property value and the tax involved. To conclude whether you can afford a property, consider the annual maintenance cost. The broker involved in making you buy a property is in the correct position to advise you of the maintenance cost in the area. Never hold back in taking his suggestion before going ahead and investing in the property.
Also, you can consult with the existing owner about the approximate maintenance cost every year. It will give you a clear sense of the exact amount you need to have for house maintenance.
Real Estate – A Good Investment Option
For the longest time, investment in real estate was the game only for the well-connected and the rich. But with the high return on investment, most people turn to real estate investment. It is a long-term investment and not an overnight rich scheme. It means you have to keep the asset with you for a long time. Whether you keep it for investment or for yourself to stay, it needs maintenance.
You need to research all the factors affecting your investment and should plan your budget accordingly. The best way to maintain your property will be to save for maintenance. Your house property will not have value if it is not well maintained. There is a sense of satisfaction which you get admiring your property. But attention has to be given to proper repairs and maintenance.