What Is The Real Cost Of Home Ownership?

Now that you have a new home, you need to be sure that you take care of it. However, do you know how much money to put away for future home repairs? Many people buy a home without thinking about upkeep and maintenance costs. There are two main ways to determine how much to save: the one percent rule and the square foot rule.

The one percent rule says that you should plan on saving 1% of the purchase price of your home each year for repairs and maintenance. That means if you buy a $150,000 home, you should set aside $1,500 a year or $125 a month. This doesn’t mean that you will actually spend this every year, but you should budget for it because some years will be more expensive than others. Keep in mind that if you bought your house at a great bargain, the 1% rule won’t work on the purchase price. Instead, you will want to estimate your yearly costs based on the actual worth of your home.

Another way to figure your budget is to use the square foot rule. For this rule, you should save $1 per square foot of your home. So, if you have an 1850 square foot home, you would need to save $1850 per year or $155 a month.

Remember, that both of these are just rules of thumb. Labor costs and material costs differ in different areas, so understanding these costs in your area will really help you determine the best savings plan.

Factors That Impact Your Maintenance Repairs

There are several factors that will make your home more expensive to maintain.

Age of the property: New homes will need less maintenance than older homes. Those built within the last 10 years will need very little work. Once a home turns about 25 years old, major components of the home will need to be repaired or replaced.
Weather: Homes that have to endure cold weather will need more repairs than those that are in warmer climates. Other weather conditions that create more repairs include high winds and heavy rains. Those areas that are very moist will also have more issues with termites and other insect infestations.
Condition of the home: If your home was well-maintained by the last owner, you will have fewer repairs than if it was neglected, no matter what the age. Also, homes that have been repaired in less than professional ways will also need more repairs.
Location of the home: Location in this instance doesn’t mean which city or state, but where in that city or state. For instance, if your home is at the bottom of a hill, it will end up with more water damage than a home at the top of a hill. Homes in flood plains, earthquake faults, or other environmental stress areas will require more maintenance than similar homes in stress-free areas.
Type of home: Single-family homes are more costly to keep up than attached homes such as condos or townhomes. In an attached home situation, your Homeowner Association fees often pay for the cost of exterior maintenance such as roofing or siding. Single-family homes, on the other hand, must take on that cost on their own.

If your home has many of these factors going against it, you will want to save more money than the rule of thumb suggests. Experts believe that an additional 10% saved per factor is a good way to plan. So, if you are following the 1% rule and are saving $125 a month, but live in a very cold area and your home is over 20 years old, you should consider saving an additional 20% or $25 a month towards your repairs.

How Long Do Things Last?

In order to prepare for your home’s maintenance needs, you will need to know how long major components in your home are supposed to last.

Appliances: Appliances last anywhere from 5 to 15 years, depending upon the appliance and the amount of use it gets. Ranges typically last 13 to 15 years, as do dryers, washers, and refrigerators. Trash compactors typically last 5 to 7 years, and dishwashers and microwave ovens last 8 to 10 years.
Decks: Under perfect conditions, decks should last about 20 years. If your deck hasn’t been kept up or is under harsh weather conditions, it will last significantly less.
Doors and Windows: Steel and wooden doors typically do not need replacing. Vinyl and screen doors tend to last about 30 years. Aluminum windows last 15 to 20 years, and wooden windows last about 30 years.
Flooring: Wood floors should last a lifetime. Vinyl floors last 50 years, linoleum for 25 years, and carpeting for 8 to 10 years.
Garage Door Openers: These last 10 to 15 years.
Heating and Air Conditioning: Even with regular maintenance, HVAC units only last 10 to 15 years.
Lighting: Lighting and electrical accessories such as switches typically last 10 to 15 years.
Paint: Paint typically lasts 15 years or longer.
Roof: Slate, copper, and concrete roofs last over 50 years, wood shakes last 30 years, fiber cement shingles last 25 years, and asphalt shingles last about 20 years.
Shutters and Gutters: Wood and aluminum shutters last about 20 years. Aluminum gutters also last for 20 years with copper gutters lasting more than 50.
Water Heaters: Gas or electric water heaters last approximately 10 years, while the tankless systems last around 20 years.