Owning a home is one of the biggest financial investments we can make, but the hidden costs of maintaining a home are often underestimated. When it comes to one of your priciest possessions, it’s important to consider the cost and need for routine maintenance. You can’t always rely on the previous owners to have fixed any issues, and the cost of postponing repairs can lead to larger problems down the road.
When owning a home, think about what the true costs of homeownership are. In addition to your monthly housing expenses, make room in your budget for putting aside money for maintenance. The costs of maintaining a home can sometimes add up to more than one month of your mortgage. The amount of money you should be putting aside for annual maintenance starts at 1 percent of the home’s cost, but that amount can (and probably will) vary. The age of the home, location, craftsmanship, and materials of the original build can contribute to higher repair costs.
A good place to start your budget is by factoring in the life expectancy for some of your home’s larger items, like roofing, HVAC, foundation, and plumbing. It’s always good to know how long things last so that you’re aware of when they need to be maintained or replaced. For example, the average life expectancy for HVAC systems runs between 15 to 25 years, depending on the type of HVAC system you have and how well you properly maintain it. If you find that your central air conditioning unit is failing or in need of an upgrade, installing a new unit can be costly. Estimates range from $3,000 to $10,000, depending on what type of unit you’re interested in installing.
Finding a Contractor
Once you’ve identified what you need to repair and how much it will cost to replace, you’ll need to hire a professional who can do the job. Hiring the right person to work on any home improvement project is vital. There are several ways to find a good contractor who will not only give you quality craftsmanship, but also affordable rates. The best contractors usually have repeat business from satisfied homeowners, so word-of-mouth referrals can be your best resource.
Friends, family, neighbors, or your HOA are typically good resources to ask. Once you’ve narrowed down a list of contractors, you can reach out to them for cost estimates or bid proposals. When considering who you want to hire for the job, keep in mind that paying a little extra for someone you’re comfortable with can be worth the additional cost. Who you hire can be just as important as the quality of their work.
Prepare for Rainy Days
Financial emergencies happen to all of us, and sometimes they happen when we least expect it. Even the most scrupulous planners can be blindsided by an event that carries with it a hefty cost. This is why it’s important to prepare and build a rainy-day fund to prevent an emergency from turning into a much larger financial problem.
Starting an emergency fund doesn’t mean that you need to set aside a large amount of cash or savings. It can be as simple as setting aside loose change and depositing it into a savings account, cooking at home more, and even taking control of your finances and budgeting more reasonably based on what you need. Small steps can provide the groundwork necessary for when those rainy days suddenly hit us.
Don’t let those pesky home repairs sneak up on you when you’re short on funds to get them fixed. Your best preparation methods are to have money saved up for maintenance expenses, contractors that you’ve already vetted, and a well-stocked toolbox that can come in handy for quick DIY fixes. Home ownership is equal parts equity as it is investment, and the investment part includes keeping up with the maintenance. It all goes into the quality of your home, for both your current living situation and its future resale value.