Budget Four Percent Annually for New House Repair Costs. Welcome to Budget Home Repair and Remodeling. Budgeting for Home Maintenance and Repair Costs. One aspect of homeownership that new and soon-to-be homeowners often ignore is the recurring and possibly steep cost of keeping that home in good shape. According to a report by the University of Illinois Extension, homeowners need to budget 1% to 2% of the purchase price of their home, each year, to cover the costs of home maintenance and repairs.
That’s $3,000 to $6,000 a year on a $300,000 home, and if it’s older or has appliances that will soon need to be replaced, you may need to set aside as much as twice that amount. When it comes to the fine line between routine home maintenance costs and those that send you into a personal financial nightmare, the tipping point is your level of vigilance. Here are some of the most common home maintenance issues and how you can keep a small problem from evolving into a hefty burden.
Water Drainage/Damage While water damage is unavoidable if the foundation of your house is cracked, much of it is preventable. Heating/Cooling Issues Roof Damage Windows. How Much Should You Budget for Home Maintenance and Repairs? How much money should you budget for home maintenance and repairs? Here are the two rules of thumb that help guide this calculation, as well as a list of home-related factors you should consider as you decide how much you need to save.
The 1 Percent Rule One popular rule of thumb says that one percent of the purchase price of your home should be set aside each year for ongoing maintenance. For example, if your home cost $300,000, you should budget $3,000 per year for maintenance. That doesn’t mean you’ll literally spend $3,000 every year. Read more: The Many Costs of Home Ownership Of course, this popular rule of thumb isn’t totally valid. The underlying price of your home and its repair costs, in other words, are “independent variables.” Read more: Sick of Mortgage Payments? The Square Foot Rule Another rule of thumb says that you should budget $1 per square foot per year for maintenance and repair costs. Read more: Why Do I Need an Emergency Fund? What Factors Should You Consider? Tulsa Habitat for Humanity.