Your search results

How to Budget for Home Repair and Maintenance Costs

Posted by Admin on March 6, 2019
| Property Maintenance, Remodeling
| 0

Contact Us

(408) 748-7592

When it comes to how you should budget for home repair and maintenance costs, there are a couple rules of thumb. One is to set aside 1 percent of the value of your home every year to cover maintenance and repairs. For example, on a $900,000 home, you would set aside $9,000 annually. Another rule of thumb is that you should budget $1 per square foot. So, for a 4,000-square-foot-home, you’d set aside $4,000 in a cash reserve for repairs and maintenance.

However, with the wide range of architectural styles and ages of buildings in the Bay Area housing market, using simple calculations to “guesstimate” home repair and maintenance costs could land you in hot water if something expensive happens.

For example, a 120-year-old Victorian that has the same sales value and square footage as a home built in the ‘1980s could easily have much higher annual costs for maintenance and repairs. But then again, if that Victorian has been immaculately maintained over the years, and the 80s house is a “tear down,” you might be saving more on upkeep and repairs with the Victorian.

In addition, home maintenance and repair costs vary based on location, as the cost of labor and materials fluctuates region by region.

Homeownership site Porch did a state-by-state study based on actual data of what homeowners paid annually to repair and maintain their homes. And no surprise here, California is one of the most expensive places to not just buy, but own a home.

Assuming the work is all outsourced, in California, homeowners spend an average of $16,957 per year to repair and maintain their homes. Yet, California wasn’t the most expensive location in the U.S. when it comes to these costs. California was seventh on the list after six East Coast states.

But knowing that California is in the upper echelons of home repair costs, if you’re a homeowner, landlord, or a brand new buyer in California, it could pay to be on the conservative side, which means having a higher-than-average cash reserve for home expenses.

Personal finance site The Balance recommends considering a variety of factors to come up with a specific calculation for what you should budget for home repairs and maintenance. These include:

  • Your property’s age, and along with that, the age of key features in the home, such as the roof and foundation. Once you know the age of key components in your home, you can estimate when they might need to be replaced and budget accordingly.
  • The local weather conditions and climate patterns. In Northern California, temperatures are relatively consistent throughout the year, rarely dropping below freezing, which means there is less strain on homes compared to place like Minnesota and Maine. However, heavy rains, strong winds, and even factors like termites can impact your homeownership costs.
  • Home location. Where the home is located in a given region will also play a role in how much you should budget. For example, homes located at the bottom of hills could have drainage and flooding issues, and locations near waterways could have mold problems.

If you’re new to an area, asking neighbors about costs they’ve experienced due to your neighborhood’s unique geography can also help you budget.

Media company HGTV recommends building your home repair cash reserve in a separate savings account from your normal checking account and even other savings accounts.

Then, put a timeline together on when you estimate certain repairs may need to happen. This will help you prioritize the most important and costly repairs first. For example, a new roof will take precedence over a new fence, so you decided to put off the fence until next year. Or, even better, repair it yourself.

Once you have your timeline and prioritized list of costs, you can put together a monthly or even semi-monthly savings plan, so you’ll be ready to get the work done when it’s needed. Once you’re confident that all of your home maintenance and repair costs are well-covered, then, and only then, can you start making reservations for your next vacation.

Partner with the Bay Area’s Leading Property Management and Real Estate Firm

At Intempus Property Management, our goal is to help you get the most from your real estate investment. We’ve been serving happy property owners in the greater Silicon Valley and San Francisco Bay areas for well over a decade. We provide a full suite of real estate and property management services, along with unrivaled customer service. Contact us today to talk to one of our friendly experts about your real estate and property management needs. We look forward to serving you!

  • Categories

Compare Listings