Calculating Home Maintenance Budget

[Collyflwr]

For those of you who have a fixed amount set aside for home maintenace, I would surely appreciate some imput. How do you calculate what your maintenance $ needs will be?

Fifteen years ago, I set up our maintenance budget. At that time, I didnt know how much to budget monthly for this. We had just put a new roof on a rental. Since I knew how much that cost, figured it would probably be the biggest expense in maintenance, I added 4% yearly for inflation and went with a 15 year life expectancy, arriving at a monthly amount for budget for each rental and used the same amount for our personal budget also. This has never been an accurate budget and I have been procrastinating in figuring a more realistic amount. Am curious how others have crunched the numbers to come up with a maintenance budget that is closer to real dollar needs.

[too-old-now]

This is inherently dependent on the current age/condition of your home.

There was an old rule of thumb that a landlord should expect 20%-25% of rent to be used towards property maintenance. Does this help at all?

[jr08]

I did a somewhat complicated home maintenance calculation... Please note this is complicated and if it's confusing just ignore this post.

I looked at each "big" replacement item -- windows, roofs, appliances, painting, etc. figured approximately how long before each got replaced -- windows in x years, roofs every x years, then divided the current (approximate) cost of each.

So if I plan to replace 10 windows every 10 years at $200 each = $2000/10 years = $200 a year for windows, a new stove in 15 years at $500 is $500/15 years = $33 a year etc. I added them up and put away the appropriate amount a month. Those the needed more immediate replacing (like the stove as soon as we moved in!) I increased the savings by that much for the first year to cover things that had to be done and I didn't have time for savings to build up, but since then have kept things pretty level.

I had a lot of extra money, but last year we also had to replace our roof and that took a big chunk out. Sorry if this is complicated, but it's something that's worked for us. Your costs will vary depending on how many things could go wrong, what you can install yourself (vs hiring someone), etc. Like DH can fix electrical outlets and such so that's a minimal expense ($5 for replacement parts), whereas for others that would be a major outlay of money. Hope this helps.

[Collyflwr]

Originally Posted by too-old-now This is inherently dependent on the current age/condition of your home.

Yes there are many variables to consider. I am thinking that a percentage of a homeowners mortgage is the way to go in setting a maintenance budget. Sorry if my intention wasnt clear, just wanted to get info rolling for homeowners, but the landlord info is interesting too. Thanks.

[BzyBee DH]

We have found that 25% of a 30-year mortgage amount to be a reasonable amount - for a home that is about 20-30 years old.

It is less for a newer home, and more for a "fixer-upper" obviously.

The problems with 1 home, is that it is 1 home. For 100 homes, the 25% is pretty good figure, but for 1 home - it can be a lot better or a lot worse.

I don't know if that helps or not.

[hotcouponmama]

I think size of the house and yard comes into play. We have a 3200sqft home (not including garage, unfinished basement crawl-area, and attic). So by virtue of the size of the home, your expenses are going to be higher.

You could factor a percentage of what it cost new to build in your area per square foot, and then the percentage * cost per sqft could give you a good indicator.

Our home average cost per square foot is $170 to build. I figure about 25% replacement cost, so $170 * .25 * 3200/30 years = $4500ish a year for upgrades and repair.

That said, in the last three years, we've spent way more than that because our yard needed major overhauling, but the house itself has maybe had $1000 a year or so repair needs.

[berlinsmommy]

I don't do a set budget but do have one comment here: preventative maintenance and planning replacements ahead of time can save you a bundle in the long run. Let me give you a few examples of things we've done that (I believe) pay for themselves or help you save money in the long run:

Just like couponing/stockpiling, plan and buy in advance. For example, I stumbled on a caulk rebate/deal when shopping for other items at Home Depot. It was B2G1 in the store and there was a $5/3 rebate, and this was the good kind (this is more DH's territory, so I don't remember the specifics of the brand and type). We bought a bunch of tubes (since the rebate allowed multiples) and as we have repainted each room, we've also stripped out all the cheap builders caulk from the windows and doors and recaulked it all carefully and thoroughly. Now that our houses are ~8 years old, many of our neighbors are having window leaks and drafts where the caulk has pulled away causing further (and more expensive) damage to the house, but we are not.

When something unexpected happens, fix it ASAP to prevent further damage. For example, we had a rough windstorm a while back that caused many houses in our neighborhood to have siding damage. When the storm was over, my DH removed the damaged siding, let the side of the house dry out, and replaced the damaged siding right away. It was all repaired within a few days. Our neighbors have left theirs ~6 months because they didn't want to do it while it was cold outside. Well, water has gotten behind the siding, frozen and thawed over the winter, and caused a LOT more damage. Ours cost ~$30 to fix, his will cost several hundred and since its deferred, his insurance will not cover it.

For big ticket items, do research before you need to buy. There is nothing worse then your stove dying and you running out and buying the first thing you see, only to find out a few months later that maybe you didn't choose the best make/model/features for your price or that it was significantly cheaper had you bought it somewhere else. If your stove, dishwasher, refridgerator, furnace, hot water heater, air conditioner, roof, washing machine, or dryer are close to the "reasonable" end of their life, you should do research now, before they die. Also in some situations (such as hot water heater) if you are near the end of its life anyway, do your reesearch, decide what you want, then watch for a sale, a coupon (like 10% Lowe's), a pricematch opportunity, or a rebate and when the best deal comes along, go ahead and buy it and replace it before it dies. This way you save yourself a lot more money then if you wait to buy it when yours dies and you prevent damage to your home by replacing it before it floods your basement. This way you can in some cases install yourself or if you need a professional, you don't have to pay their emergency rates. Same goes for air conditioners and furnaces. If you buy and install off season you can save yourself a bundle, but if you wait until your A/C dies on the 4th of July weekend, you will pay through the nose for a new one and for installation.

PREVENTATIVE MAINTENANCE IS KEY!!! We change out our washer hoses every few years and only use steel braided. Overkill? Maybe, but at $14 or so (I usually toss them in when I have a 10% coupon or something to save a little) every ~5 years that cost is nothing compared to what I'd pay if my washer flooded, and most washing machine floods are caused by a broken hose. I already explained the recaulking, but this needs to be routinely done for showers, tubs, sinks, and counters as well. Prevent frozen pipes with extra insulation or heat tape as needed. Make sure all grout in your home is in good condition and properly sealed. Regrout and reseal as needed. Clean your A/C seasonally and change furnace filters regularly. Flush out your hot water heater periodically. Check your roof, windows, siding or stucco, etc. regularly and make repairs and fix potential problems ASAP. Keep your gutters clean and routinely check that they drain properly.

Sorry for the long post, but I'm continually shocked by the number of people who don't maintain their home properly because they think its expensive and then they are slammed by large, expensive repairs that could have been easily prevented.

[MrsPinecone]

Berlinsmommy is right about the preventative maintenance.

We once skipped the annual service for our furnace, because we didn't want to spend the $85-100 or whatever it was. A month later, we got socked with a $275 bill because the furnace went out. Lesson learned. :rolleyes: