You’ve finally done it, you are a certified homeowner! It’s natural to wonder how much money you need to have on reserve to protect and maintain the quality of your home. If you weren’t thinking about that until the previous sentence, don’t fret – it’s a surprisingly common oversight.
As a home owner, you should have two funds that you keep topped off: (1) an emergency fund, and (2) a home maintenance fund. As it relates to a home maintenance fund, it is important to have a budget for standard repairs and maintenances, while (2) relates to maintenance and repairs that you could not have foreseen.
With regards to your home maintenance fund, you should save between 1 percent and 4 percent of the total price of your home, per year, to cover standard repairs and maintenance; where you fall on this range is dependent on how old your home is, and what its current condition is. When your home is less than 5 years old, 1% of the total price of the home will be sufficient for your home maintenance fund, but if your home is over 25 years old, you will likely need to save about 4% of the total price.
Throwing numbers like that ($5,000 to $20,000 per year) around can make people a little nervous – that makes sense. So, the next question becomes how to reduce that annual cost. The first step to saving money on standard maintenance and repairs is to be familiar with your home, get a sense for how old everything in your house is – everything has a shelf life.
Next, similar to your health, be proactive! Fixing something is much cheaper than replacing it, and many things can be fixed if addressed early enough. In a similar vein, you should actively look for things that are wrong with your home and fix them immediately. Think you are imagining the sound of water dripping at night? You probably are, but get it checked out anyways – it’s cheaper in the long run. Finally, watch some videos on basic home maintenance; DIY projects are great for small projects – and if you are vigilant, most projects will be small because you caught the problem early on.
At the Chernov Team we know that knowledge is power. Since money is power as well, it’s a double dose of power to understand what costs will be associated with owning your home, and how to save on that predictable expense. At the Chernov Team we understand that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.