House maintenance budget

[Maistre Gracey]

How much do you budget for house maintenance AND eventual redos, such as kitchen, bathrooms, etc...?
I have read between 1 and 2 percent of house value annually, depending on value of house. Higher value closer to 1%, lower closer to 2%.

We built a new house and I’m trying to make sure we are prepared for future expenses. I’m currently stashing 2% aside, but I’m also wondering if that should just go to paying principle. Then, I can always borrow against equity for repairs.

Thoughts...???

 

[dclpluto]

How much do you budget for house maintenance AND eventual redos, such as kitchen, bathrooms, etc...?
I have read between 1 and 2 percent of house value annually, depending on value of house. Higher value closer to 1%, lower closer to 2%.

We built a new house and I’m trying to make sure we are prepared for future expenses. I’m currently stashing 2% aside, but I’m also wondering if that should just go to paying principle. Then, I can always borrow against equity for repairs.

Thoughts...???

one good thing you got a new house. You shouldn’t have to do hardly anything in the first ten years. Maybe a hot water heater if you got yourself a 15 year mortgage I wouldn’t worry about it. When your house is paid off you will have that extra money to save.
never ever borrow against equity. I say again never ever borrow against equity.
It’s great you got a new house but you might have some expenses that a pre own house wouldn’t have. Landscaping, maybe you need a shed?

 

[Shanna-like-Banana]

We have lived in this house for 3.5 years, we are the second owners, it is 8 years old. We have had to do significantly less home maintenance in this home than our previous home which was a brand new build.

In this home, we had to replace the water ejection pump in the basement. We budget for the house to get pressure washed once a year in the spring, because we live in the South and after we have the pollening, it needs it. We also budget to have the carpets cleaned 2x year, in the spring and in the fall.

We had a handful of small electrical things did just because we wanted to. We are going to need to have our AC looked at soon, since one of our kids rooms doesn't seem to be hardly getting any air.

Our old house, which was a brand new build, had far more problems than this house, but I 99% contribute that to the builder, not it being a new build.

 

[kdonnel]

2% looks to be about right when looking back at my expenses over the past 15 years. That includes the planned kitchen and master bath remodel we are just about to start.

 

[martikus]

2% is prob too high but would give you a great stash of you ever want to do a pricey bath or kitchen Reno.

the big stuff like ac/heater isn’t until 10-15 years. Roof 20ish years. Appliances 5-10 years since so poorly made.

The stash helps cover things like calling a plumber when you have a leak or once a year mulch etc.

 

[tvguy]

Wow, that is going to be a highly personal decision on some of those items like redoing bathrooms and kitchens. With proper upkeep that would be an optional expense, not a necessity in my book. We elected to remodel our house, kitchen and bathrooms after having lived in our house 30 years, the house was 34 years old. Only one bathroom needed repair, the other bathroom and kitchen were functionally and structurally fine. We just wanted an update. My parents never remodeled their house in 53 years. Yes some of the designs were dated but everything was functionally and structurally good.
I don't set aside a specific amount each year for home improvements. I do have $20,000 set aside as an emergency fund for home repairs. Just replaced the water heater in November, but that $2,000 for that I was able to come up with out of our paychecks. I've never gotten less than 20 years from a water heater, so that shouldn't be an issue for a couple of decades. Roof was done 7 years ago, and should be good for at least another 20 years. I have $4,000 fencing to repair, We had a big wind storm here in January and it seems like everyone lost fencing. There is no wood available yet, so I have managed to save the money from paychecks the last 3 months.
HVAC is the only thing left. It's 30 years old, and I have it serviced twice a year. The techs says it could die tomorrow, or go another 30 years. All the readings on the compressor and other electronic components come back within normal range, so I hope for another 30 years. I asked the tech if my system was the oldest among those he services, and he said no. He has a customer with a 70 year old Lennox system that is still going strong.

 

[RamblingMad]

Depends where you live. When I lived in the southeast, my maintenance was easily 2-3% of the home value. Now, that I'm back in the southwest, it's maybe 1%.

My preference is not to redo anything. I get changing out appliances and HVAC as they age, but I'm not a fan of remodeling. I don't need the stress.

And I would never borrow against equity for repairs.

 

[luv2sewtjr]

The number depends on your value, but even with a new build, you’ll need blinds and curtains right off the bat. My house was 5 years old when we purchased it but had cheap mini blinds. Our budget was tight so it took about 3 years to get things the way I wanted (high quality faux wood, curtain rods, and so on).

What about landscaping? Some builders have an allowance and others just plant a couple things. That is an ongoing project for me (I’m going on year 20 btw), but it’s faster to hire lit.

Bank the money because things break in spurts anyway. I have a well and I hate when anything breaks in the basement storage room because it’s always about a grand.

 

[nolatravelgirl]

I would not be focusing on paying down principle. Your home is not a liquid asset and mortgage interest rates are hovering between 2% and 4%. I would never depend on getting a home equity line of credit as that is never guaranteed. I would put anything you were considering paying down principle and stash it in an index fund.

 

[Judique]

How much do you budget for house maintenance AND eventual redos, such as kitchen, bathrooms, etc...?
I have read between 1 and 2 percent of house value annually, depending on value of house. Higher value closer to 1%, lower closer to 2%.

We built a new house and I’m trying to make sure we are prepared for future expenses. I’m currently stashing 2% aside, but I’m also wondering if that should just go to paying principle. Then, I can always borrow against equity for repairs.

Thoughts...???

You should be good with 2 %, but we don't know what 2% is. On a 500K home that is 10k per year. Some things would eat that 10K quickly.

Is this your forever home? Is it located where you will live for a few years or for the rest of your life?

With a new build you 'should' be free from having structural repair costs and your appliances should last maybe that long. I just replaced a high efficiency gas furnace that was not quite 8 years old.

Everyone's situation is different. I can say that I don't want the same kitchen for more than maybe 12 years, but someone above me was happy for 30 years.

 

[Anthony1971]

I would say it all depends....
Most everything in your house has an expected life. What you replace it with is a choice. You can buy an 800 Refrigerator or a 2,000 one?
same with just about everything. The most important thing is maintaining what you have like buying a 8 dollar appliance brush and cleaning the dust from the bottom coils of your refrigerator twice a year you also need a shop vac as the dust will clog a regular vac fast....also your dryer vent at least once a year... cleaning the coils on a central AC unit at least once a year more if you run it 8-10 month a year... spray with normal dish soap and water and house it down or you can buy a special cleaner. watch youtube read articles everything will last longer plus regular filter changes - you can buy a case at HD online of regular duty filter for a few dollars each. Major remodels most are a choice BUT if you decide to move walls the price will go up real fast... things will and can go wrong with your house if you have the knowledge and or are willing to change things on your own you will save $$$$ most repairs involve a 10 part and 200 in labor.... Many faucets come with lifetime warranties so long as you are the original owner the valves are free with a phone call but they are not worth anything if you need to call someone to replace it as a plumber will not use your part an rightfully so as if it breaks 2 day later they will not warranty the work. (and it did happen to me recently. I called and they send another) Most are very easy some like Moen require a special tool which any lowes or HD carries or amazon or Moen itself when you order the new valve.
so my though it on paying off a Mortgage is not the same as above. I personally pay off mortgages as fast as I can you save a lot of money in interest very quickly the tax deduction you get is far less than what is said once you realize you are giving up your standard deduction. We try to have a home equity line of credit -- most banks will pay you to have one... using it well if you have to for your house that is fine but the more important part is it shows you have a mortgage although you really do not this is more for asset protection. This is a personal choice do your research and what is best for you as there are many ways of thinking. I do recall from the distant past you owned a condo and bought a house later.. hope it is going well and make maintaining it you new hobby I want out of mine when my kids are done with college (not that many years off) and will enjoy a condo with a pool. For the record most of my costs came from things I wanted in the house and not normal fixing things but I have some experience in general construction so I can do many things and learn what I don't know.

 

[barkley]

excellent advice on upkeep/maintenance. it is AMAZING how much longer the lifespan on an aspect of your home can be extended with simple, regular and inexpensive attention. i am always reminded of it's importance when i think of a rental home we lived in for a year in between selling our former home and buying our current. within a month of moving in-during a horrific heat spell the a/c went out so the landlord dispatched an hvac company that discovered the previous tenant had NEVER in their tenancy (3 years) replaced the simple $3 filter. we already had it on our calendar to check a couple of months into our tenancy (depending on the home/the hvac we've always replaced ours quarterly at minimum-if an uber dusty environment-every other month), and it slipped the landlord's mind to check it in between tenants. the upshot-not only was the entire hvac unit ruined-it collapsed all the duct work (they literally looked like the hulk had crushed them). tens of thousands in repairs all for the lack of a $3 filter.

 

[DLgal]

excellent advice on upkeep/maintenance. it is AMAZING how much longer the lifespan on an aspect of your home can be extended with simple, regular and inexpensive attention. i am always reminded of it's importance when i think of a rental home we lived in for a year in between selling our former home and buying our current. within a month of moving in-during a horrific heat spell the a/c went out so the landlord dispatched an hvac company that discovered the previous tenant had NEVER in their tenancy (3 years) replaced the simple $3 filter. we already had it on our calendar to check a couple of months into our tenancy (depending on the home/the hvac we've always replaced ours quarterly at minimum-if an uber dusty environment-every other month), and it slipped the landlord's mind to check it in between tenants. the upshot-not only was the entire hvac unit ruined-it collapsed all the duct work (they literally looked like the hulk had crushed them). tens of thousands in repairs all for the lack of a $3 filter.

Wow. Every house we have rented has included a clause in the lease about changing HVAC filters being our responsibility. I'm shocked that the landlord didn't check the status of the filters when he turned over the unit to you, at the very least. An expensive mistake, to be sure.

 

[Cynt]

My home maintenance budget and home emergency budget are 2 different budgets. Routine Maintenance budget we keep a couple of grand. Home emergency budget $15k+. I add to this account every pay check.

We purchased a new home 12 yrs ago. No major repairs yet. So far routine maintenance has served us well. We have older neighbors next door. We watch what they do and copy. Like I never knew about cleaning the dryer vent thing to outdoors. So that's the next thing on my maintenance list. They just painted their house trim outside so we'll get bids on that as well. We usually use who they used. LOL! They really help us keep up with all of that.