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Figuring Your Annual Home Maintenance Budget

Buying a home is exciting, and it frees you from many of the burdens associated with renting. However, as a homeowner, you’ll need to make sure you create an annual home maintenance budget so you can avoid expensive repairs by keeping things in good working order all year round. Here are two rules for doing just that.

annual home maintenance budgetThe 1% Rule

One of the most popular rules regarding your annual home maintenance budget involves setting aside 1% of your home’s purchase price each year for regular maintenance, including things like annual HVAC servicing and roof inspections. This means that if you spent $400,000 on your home, you’ll set aside $4000 each year for maintenance and repairs. You won’t spend all $4000 each year, but you should still set it aside – preferably in an interest-bearing savings account. Replacing a roof on a $400,000 home may cost $10,000 or more, and you’ll be glad you budgeted ahead of time.

The Square Foot Rule

Another option involves saving $1 for every square foot of your home. If your luxury home is 2500 square feet, you should budget $2500 annually for maintenance. It certainly seems to make sense. After all, the more space you have, the more you’ll need to spend to maintain it. However, this doesn’t account for things like labor and materials, which can be quite expensive depending on the company you select. Like the 1% rule, though, the odds that you’ll spend all $2500 each year are slim, so your funds can continue to accrue when no repairs are necessary.

Other Annual Home Maintenance Budget Considerations

Of course, neither of these rules can account for all the possible variables that may affect your home maintenance budget. The most common variables include:

  • Location. If your home is in a flood area, at the bottom of a hill or mountain, or in some other area that may create an environmental problem, then your home will likely need more care and maintenance. This means you should budget accordingly.
  • Weather. Freezing temperatures, snow, and ice can take a toll on a home, as can things like high wind. Consider the climate carefully, look at the positioning of your home, and adjust your annual home maintenance budget to suit.
  • Age. A newer home will require far less maintenance than an older one, and a home that has been well-maintained will require fewer repairs.
  • Condition. Careful maintenance can keep a home in pristine condition, even if it’s 100 years old or more. Consider the overall condition of your home when you’re creating your budget. If it’s been a long time since major components like the roof or HVAC system have been replaced, consider budgeting a little more each year.

As you can see, creating a home maintenance budget doesn’t have to be a difficult task. Consider all of the factors that may affect your home – including its location, the climate, and the home’s age and condition – and then choose either the 1% or the square foot rule as your baseline.

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