How much should we budget for home maintenance?
November 2, 2014 7:00 PM Subscribe
How much should we budget for home repairs? The internet gives pretty varied advice. 1% of the purchase price per year? 4.5% of the purchase price per year?
We are trying to think through a possible move.
We know what our current house has cost, and it just doesn't seem realistic to imagine any house could cost more than 2% a year on average. Sure, if the roof needs replacing, that's a big cost, but roofs last a while so it's not like you'll have to replace it again next year. HVAC, windows, and plumbing seem to be the only other major systems that would require big and unexpected outlays, and even if you had a bad year it seems like 4.5% is a maximum, not an average.
But maybe we've been lucky. When we consider moving, we need to know what to budget for a different house, so if prices will vary as drastically as our Googling suggests, then we need to be a lot more careful. We live in a pretty expensive place, so maybe this just seems so unrealistic because the housing prices are badly inflated.
Any guidance (personal experiences or general advice) would be welcome.
We are trying to think through a possible move.
We know what our current house has cost, and it just doesn't seem realistic to imagine any house could cost more than 2% a year on average. Sure, if the roof needs replacing, that's a big cost, but roofs last a while so it's not like you'll have to replace it again next year. HVAC, windows, and plumbing seem to be the only other major systems that would require big and unexpected outlays, and even if you had a bad year it seems like 4.5% is a maximum, not an average.
But maybe we've been lucky. When we consider moving, we need to know what to budget for a different house, so if prices will vary as drastically as our Googling suggests, then we need to be a lot more careful. We live in a pretty expensive place, so maybe this just seems so unrealistic because the housing prices are badly inflated.
Any guidance (personal experiences or general advice) would be welcome.
Our costs for a modest row house in suburban Canada are in the 1% to 2% range per year in a normal year. This is going on ten years of home ownership with 1-2 projects per year (landscaping, new a/c, front door, roof, etc...). Two years where we did bump over that ceiling included big projects: finishing a basement and renovating a bathroom (both included contractors). Both increased costs up to the 4% to 5% range.
So for us, the lower range is regular maintenance, the higher range represents a significant house upgrade.
posted by bonehead at 7:13 PM on November 2, 2014
So for us, the lower range is regular maintenance, the higher range represents a significant house upgrade.
posted by bonehead at 7:13 PM on November 2, 2014
I'm not sure it makes sense to look for a metric based on home purchase price. Home purchase price is influenced heavily by location but repair and maintenance costs are much less so. Picture two identical houses, one located in Manhattan (ARE there houses in Manhattan?) vs. in rural nowheresville. The house in New York will be orders of magnitude more expensive. However, the same repair (say replacing the AC) might costs a little more in NYC due to higher labour costs, but it won't be orders of magnitude more expensive.
So instead of doing purchase price, I would actually work out a quasi-budget -- for the regular/expected/scheduled stuff (landscape, snow, eavestrough cleaning, etc.) do a ballpark budget. Then add 3 small repairs worth per year -- say $200-$500 per repair -- and one quarter or one fifth of a large repair (find out what something like roof replacement, AC replacement, hardwood floor installation, or rewiring costs on your area...that's your large repair cost). Using something like hardwood floor installation, which will vary based on your home size, would probably be a way to ensure you save enough. Whether you save 1/4, 1/5 or even half of a large expense each year, will depend on the age and condition of your home. How often would you likely have to do a large repair?
posted by If only I had a penguin... at 7:44 PM on November 2, 2014 [2 favorites]
So instead of doing purchase price, I would actually work out a quasi-budget -- for the regular/expected/scheduled stuff (landscape, snow, eavestrough cleaning, etc.) do a ballpark budget. Then add 3 small repairs worth per year -- say $200-$500 per repair -- and one quarter or one fifth of a large repair (find out what something like roof replacement, AC replacement, hardwood floor installation, or rewiring costs on your area...that's your large repair cost). Using something like hardwood floor installation, which will vary based on your home size, would probably be a way to ensure you save enough. Whether you save 1/4, 1/5 or even half of a large expense each year, will depend on the age and condition of your home. How often would you likely have to do a large repair?
posted by If only I had a penguin... at 7:44 PM on November 2, 2014 [2 favorites]
Our goal based on 7 years of experience at this point is 10% of our mortgage payment. This year we've re-lined a chimney (1500) and re-wired our ground floor (800). Previously we had a roof issue (3000). We've also re-painted the exterior this year (400). Things I have not done because they are not strictly necessary: replaced a really crappy tap (170), an over fan (160) and a dryer door and seal (60).
posted by DarlingBri at 7:44 PM on November 2, 2014
posted by DarlingBri at 7:44 PM on November 2, 2014
I think the cost depends in large part on how old your home will be, and what problems it comes with when you buy it, and where your home will be, and what the weather is like there. I live in the Midwest. I've been in my current home, which is 50 years old and has had multiple previous owners who fancied themselves handy, for eight years. In that time I have had to replace part of the rear siding (ice storm + half of a tree), cut down half a tree (see aforementioned ice storm), replace half the front soffit (tornado), replace a gutter (thunderstorm) replace the entire, less-than-ten-years-old roof (golf-ball sized hail-- insurance paid for PART but not all of this damage), replace a front window (inner pane of dual pane cracked: record cold snap). Last year we had to replace the air conditioner and the heater, because the AC had repeat storm damage (that insurance refused to cover) and the heater had a defective part (that the company refused to honor the "lifetime" warranty on). Once when we replaced a bathroom vanity we discovered that the previous owners had tiled around but not under the old vanity which means we had to retile the whole floor. We've had to rewire an outdoor light fixture and redo plumbing because a previous owner had done it wrong. This month I am having the entire floor including the subfloor AND the tub replaced in a bathroom because the previous owners improperly installed the wrong type of subfloor and also poorly installed the shower enclosure and we've had ongoing water damage issues since move-in.
And that's just the big stuff.
OTOH, we don't pay gardeners to mow our lawn.
We don't have leftover house money for such fancified things as sitting around watching someone else mow our grass ;)
posted by BlueJae at 7:44 PM on November 2, 2014 [2 favorites]
And that's just the big stuff.
OTOH, we don't pay gardeners to mow our lawn.
We don't have leftover house money for such fancified things as sitting around watching someone else mow our grass ;)
posted by BlueJae at 7:44 PM on November 2, 2014 [2 favorites]
Best answer: I don't think percent of the purchase price is a good formula.Think about it... then a house that sells for a low value because it's in poor shape would be expected to have lower maintenance costs, which makes no sense.
Honestly most of the costs are fixed. Sure a nice house will have nicer versions of everything, but we're talking like 20% nicer, not like 1000% nicer.
So instead I'd think of it in terms of depreciation on capital. You spend a lot on something initially, then it depreciates over time until you have to replace it... Your depreciation is the real expense. When something hits zero value then you have to replace it.
Here would be my quasi-budget:
All appliances: $5000, last 8 years average = 625
HVAC: $5000, lasts 10 years average and needs $300/year regular service = 800
Roof: $12000, lasts 25 years average = 500
Kitchen counters and cabinets: $15000, lasts 20 years average = 750
Each bathroom: $8000, lasts 20 years average = 800 for a 2 bath house
Deck: $5000, lasts 20 years average = 250
Interior paint and flooring: $5000, lasts 10 years average = 500
Exterior paint/siding: $10000, lasts 20 years average = 500
Sewer line: $10000, lasts 30 years = 333
Total: $5058/year
posted by miyabo at 8:22 PM on November 2, 2014 [13 favorites]
Honestly most of the costs are fixed. Sure a nice house will have nicer versions of everything, but we're talking like 20% nicer, not like 1000% nicer.
So instead I'd think of it in terms of depreciation on capital. You spend a lot on something initially, then it depreciates over time until you have to replace it... Your depreciation is the real expense. When something hits zero value then you have to replace it.
Here would be my quasi-budget:
All appliances: $5000, last 8 years average = 625
HVAC: $5000, lasts 10 years average and needs $300/year regular service = 800
Roof: $12000, lasts 25 years average = 500
Kitchen counters and cabinets: $15000, lasts 20 years average = 750
Each bathroom: $8000, lasts 20 years average = 800 for a 2 bath house
Deck: $5000, lasts 20 years average = 250
Interior paint and flooring: $5000, lasts 10 years average = 500
Exterior paint/siding: $10000, lasts 20 years average = 500
Sewer line: $10000, lasts 30 years = 333
Total: $5058/year
posted by miyabo at 8:22 PM on November 2, 2014 [13 favorites]
Yes, prices vary too much. Some of my friends have houses that cost twice what mine did just because of location; our houses are the same size, and we pay the same costs in roofing, replacing water heaters, etc. But the "percent of purchase price" we're paying would be very different because my house cost much much less, but we have the same maintenance costs!
In contrast, some of my friends have houses that cost the same as mine did, but my house is 60 years old and theirs is 120 years old. They typically pay QUITE A BIT MORE in maintenance because the house simply needs more maintaining, and sometimes the house systems are specialized or the materials are unusual/expensive.
You'd probably need to look at maintenance costs for the type and size of house you're buying. Buying a cozy, new-built two-bedroom cottage in a ritzy suburb might cost the same as a rambling 120-year-old Queen Anne in a rundown urban neighborhood, but the ongoing costs will be wildly different.
posted by Eyebrows McGee at 8:24 PM on November 2, 2014
In contrast, some of my friends have houses that cost the same as mine did, but my house is 60 years old and theirs is 120 years old. They typically pay QUITE A BIT MORE in maintenance because the house simply needs more maintaining, and sometimes the house systems are specialized or the materials are unusual/expensive.
You'd probably need to look at maintenance costs for the type and size of house you're buying. Buying a cozy, new-built two-bedroom cottage in a ritzy suburb might cost the same as a rambling 120-year-old Queen Anne in a rundown urban neighborhood, but the ongoing costs will be wildly different.
posted by Eyebrows McGee at 8:24 PM on November 2, 2014
Best answer: Since you just need a ballpark number, can you use 2-3% to aid your searching, and then thing about true cost when you look at the specific house?
posted by Eyebrows McGee at 8:26 PM on November 2, 2014
posted by Eyebrows McGee at 8:26 PM on November 2, 2014
It really depends on where the house is. Genrerally the higher the temperature difference between the seasons the greater the expense. The wetter the climate the greater the expense. The more likely there are to be bugs the greater the expense [usually the more tropical climates here].
I've lived in the North and Wet, the South and Wet, the average Midwest, the Really Cold and then Hot, and the Dry. I've worked in repair in all those climates.
Maintenance is less expensive in the the Dry where there is the least temperature change.
posted by vapidave at 8:41 PM on November 2, 2014 [1 favorite]
I've lived in the North and Wet, the South and Wet, the average Midwest, the Really Cold and then Hot, and the Dry. I've worked in repair in all those climates.
Maintenance is less expensive in the the Dry where there is the least temperature change.
posted by vapidave at 8:41 PM on November 2, 2014 [1 favorite]
However you calculate the cost, bear in mind that it's likely to be front-loaded. People thinking of moving OUT of a house are often skimping on maintenance, possibly for the same reason that they are moving: they can't afford it, or they are no longer physically able to do it. Or they are just saving money to spend on their nice new house.
So my current house has average maintenance costs overall (about 1% probably), but when we moved in we soon found ourselves capping a chimney and replacing the boiler, half the windows, and the kitchen (more like 5%).
posted by emilyw at 2:48 AM on November 3, 2014 [2 favorites]
So my current house has average maintenance costs overall (about 1% probably), but when we moved in we soon found ourselves capping a chimney and replacing the boiler, half the windows, and the kitchen (more like 5%).
posted by emilyw at 2:48 AM on November 3, 2014 [2 favorites]
Budget All The Money. Just kidding. Kinda.
Like the posters above I think a percentage of purchase price is a bad metric for this type of thing. And the comment about the costs being front loaded is likely true too. I think miyabo pretty much has the answer to how you're going to have to calculate this for your purposes.
posted by PorcineWithMe at 3:27 AM on November 3, 2014
Like the posters above I think a percentage of purchase price is a bad metric for this type of thing. And the comment about the costs being front loaded is likely true too. I think miyabo pretty much has the answer to how you're going to have to calculate this for your purposes.
posted by PorcineWithMe at 3:27 AM on November 3, 2014
Best answer: Here's just one of several online home repair, maintenance, and renovation calculators that give some ballpark figures by zip code. No, it doesn't make sense to calculate home repair amounts by purchase price. Use local repair costs as a guideline.
We mentioned to one of our kids who was buying a house that setting aside and replenishing a fixed fund of $5000 for annual home maintenance was worth thinking about. If he got hit with something big, then at least he'd have $5000 set aside for part of the repair. If not, then there was money available for small repairs. Not that said kid did it, but the advice still stands. It is also true, as someone upthread mentioned, that maintenance problems a seller deferred, which the home inspector missed, kick in the day after the closing.
posted by Elsie at 4:09 AM on November 3, 2014
We mentioned to one of our kids who was buying a house that setting aside and replenishing a fixed fund of $5000 for annual home maintenance was worth thinking about. If he got hit with something big, then at least he'd have $5000 set aside for part of the repair. If not, then there was money available for small repairs. Not that said kid did it, but the advice still stands. It is also true, as someone upthread mentioned, that maintenance problems a seller deferred, which the home inspector missed, kick in the day after the closing.
posted by Elsie at 4:09 AM on November 3, 2014
Best answer: I think that it's possibly worth considering the difference between maintaining and repairing, in this context. Maintaining is the easy stuff, and is cheap--hundred bucks for someone to fix a busted light fixture, for example. It's relatively easy to budget for this kind of thing, because you can pretty much assume that in any year, you'll have a steady stream of this sort of thing. My bet is that when you see people saying 1-2% of purchase price (which is a bad metric, but this is an example, so whatever) that's what they're talking about.
Repairing is where things start to get expensive. I bought a house for $100k. Nine months after we moved in, the water line from the street to the house broke, and it cost $2500 to have it repaired. A month or two later, we discovered that an ambiguous something was leaking from the bathroom, and that the dining room ceiling was full of water. We discovered this, by the way, when a 2'x2' chunk of the ceiling swelled and burst like a water balloon. The ceiling fix alone was about a thousand bucks. The rest of the year continued in that vein. And this isn't stuff that you can plan for, really--you might have ten years without incident, and then in year eleven, your water line goes, the furnace blows out, and the roof springs a leak, and all of a sudden you're looking at five figures of repairs. Some people file this stuff as maintenance costs, and some don't, and I think that's part of why you're seeing the range that you're seeing.
I like miyabo's numbers, but feel that they neglect to account for the potential for catastrophe when something stops working. If the hot water heater goes and floods your basement in the process, or if a pipe springs a leak while you're at work and you come home to a soaked, crumbling wall, you're looking at a lot more than just the cost of the plumbing repair or appliance replacement. Most homeowner's insurance specifically excludes damage from things like plumbing issues and acts of God, so you're potentially on your own for a lot of stuff.
I'd argue, basically, that more important than allowing x% wiggle room in your budget, you should set aside a big chunk of money at the start and then add to it. Saving [whatever] a year for house stuff doesn't do you any good if you end up needing major repairs in the first few years you own the house--and it seems like everyone ends up needing major repairs in the first few years.
posted by MeghanC at 4:12 AM on November 3, 2014 [1 favorite]
Repairing is where things start to get expensive. I bought a house for $100k. Nine months after we moved in, the water line from the street to the house broke, and it cost $2500 to have it repaired. A month or two later, we discovered that an ambiguous something was leaking from the bathroom, and that the dining room ceiling was full of water. We discovered this, by the way, when a 2'x2' chunk of the ceiling swelled and burst like a water balloon. The ceiling fix alone was about a thousand bucks. The rest of the year continued in that vein. And this isn't stuff that you can plan for, really--you might have ten years without incident, and then in year eleven, your water line goes, the furnace blows out, and the roof springs a leak, and all of a sudden you're looking at five figures of repairs. Some people file this stuff as maintenance costs, and some don't, and I think that's part of why you're seeing the range that you're seeing.
I like miyabo's numbers, but feel that they neglect to account for the potential for catastrophe when something stops working. If the hot water heater goes and floods your basement in the process, or if a pipe springs a leak while you're at work and you come home to a soaked, crumbling wall, you're looking at a lot more than just the cost of the plumbing repair or appliance replacement. Most homeowner's insurance specifically excludes damage from things like plumbing issues and acts of God, so you're potentially on your own for a lot of stuff.
I'd argue, basically, that more important than allowing x% wiggle room in your budget, you should set aside a big chunk of money at the start and then add to it. Saving [whatever] a year for house stuff doesn't do you any good if you end up needing major repairs in the first few years you own the house--and it seems like everyone ends up needing major repairs in the first few years.
posted by MeghanC at 4:12 AM on November 3, 2014 [1 favorite]
If you buy a new home, your major expenses may be covered under a warranty, and hopefully your builder is solid so major things won't be exploding within the first few years of ownership.
I bought a 50 year old house and spent ALL kinds of money on it, nearly half of the purchase price over 6 years. All on decidedly unsexy things, like new siding for the back of the house, replacing the sewer pipe twice, etc.
With a 20 year old HVAC and a ??? roof we sold and moved because we ran out of money.
That said, Miyabo for the win. Even included the sewer pipe!
posted by Ruthless Bunny at 5:18 AM on November 3, 2014
I bought a 50 year old house and spent ALL kinds of money on it, nearly half of the purchase price over 6 years. All on decidedly unsexy things, like new siding for the back of the house, replacing the sewer pipe twice, etc.
With a 20 year old HVAC and a ??? roof we sold and moved because we ran out of money.
That said, Miyabo for the win. Even included the sewer pipe!
posted by Ruthless Bunny at 5:18 AM on November 3, 2014
Best answer: During the first two years in our 60 year old house we ended up spending about $6000/year on random repairs (leaking roof and moldy bathroom ceiling, concrete walkway and front steps, exterior doors, broken trees, new carpet for basement, dishwasher replacement, etc.). Then our basement flooded during massive rains this summer, and we're looking at $60,000 to put in drain tile/sump pump and rebuild. It is insane. We never ever planned on spending that much money in the basement, but now the long-term choice is to do all or nothing. I hope to god that our furnace and roof make it another couple years.
Save all the money. Shit happens.
posted by Maarika at 5:30 AM on November 3, 2014 [1 favorite]
Save all the money. Shit happens.
posted by Maarika at 5:30 AM on November 3, 2014 [1 favorite]
Response by poster: Thanks everyone. The message I'm getting is that buying a "used" house is a massive gamble. That's kind of scary and disheartening. I had really hoped we could safely budget for this without a move exposing us to bankruptcy.
Our current home (which is about ninety years old) came with a one year warranty, and I'm wondering if anyone else has had positive experience with that mitigating the worst of these problems. We didn't end up using it so it felt like a waste, but again it looks like we were just lucky.
posted by anotherpanacea at 6:08 AM on November 3, 2014
Our current home (which is about ninety years old) came with a one year warranty, and I'm wondering if anyone else has had positive experience with that mitigating the worst of these problems. We didn't end up using it so it felt like a waste, but again it looks like we were just lucky.
posted by anotherpanacea at 6:08 AM on November 3, 2014
Here's my semi-positive experience with my house.
We bought a house that had obviously been neglected. We knew that this was getting us a massive discount on the sale price compared to a similar house in good condition. Then we planned out a several year maintenance catch-up plan. Overall it's cost less, I think, than buying a tip-top house, and it's had the advantage that we could stage the expenditure to suit ourselves rather than having to incur the debt up front with a higher mortgage.
It's also great that we've been able to do things to suit our own taste, for example, picking the windows we liked. The only thing I don't like is the bathroom. It was the one thing that had been replaced recently when we bought the house. It had been done on the seriously cheap and while I don't like it at all, I can't justify replacing a brand new bathroom.
posted by emilyw at 6:53 AM on November 3, 2014
We bought a house that had obviously been neglected. We knew that this was getting us a massive discount on the sale price compared to a similar house in good condition. Then we planned out a several year maintenance catch-up plan. Overall it's cost less, I think, than buying a tip-top house, and it's had the advantage that we could stage the expenditure to suit ourselves rather than having to incur the debt up front with a higher mortgage.
It's also great that we've been able to do things to suit our own taste, for example, picking the windows we liked. The only thing I don't like is the bathroom. It was the one thing that had been replaced recently when we bought the house. It had been done on the seriously cheap and while I don't like it at all, I can't justify replacing a brand new bathroom.
posted by emilyw at 6:53 AM on November 3, 2014
Best answer: The message I'm getting is that buying a "used" house is a massive gamble.
Yes, it is. A big one. But then there are people who haven't spent much in the entire time they've owned their houses.
That said, you can make the buyer pay for a year's warranty, we did that when we sold. They used it too. (Better them, than me.)
Also, pay extra for a very good inspection. $350 is standard, about $600 for an inspection that will actually save you from a disaster. Do a door blower test, have the infra-red moisture readings, have a plumber put a camera down the pipes. Don't I wish I had done that.
Also, often you'll hear, "Oh, it's broken, but it'll only take BAH to fix it." Eh...don't bet the ranch on that. Have a vendor come to actually cost the thing out. An inspector might tell you that the roof looks to be in bad shape, a roofer will tell you what all is involved in fixing and replacing it.
Home ownership is not cheaper or even a better investment than renting. It just isn't. You might get lucky and break even, or even pay it off and live in it forever. But some people really like being homeowners. They love the permanancy of it. Bless their hearts. If that's you, then just be informed and careful.
posted by Ruthless Bunny at 8:42 AM on November 3, 2014
Yes, it is. A big one. But then there are people who haven't spent much in the entire time they've owned their houses.
That said, you can make the buyer pay for a year's warranty, we did that when we sold. They used it too. (Better them, than me.)
Also, pay extra for a very good inspection. $350 is standard, about $600 for an inspection that will actually save you from a disaster. Do a door blower test, have the infra-red moisture readings, have a plumber put a camera down the pipes. Don't I wish I had done that.
Also, often you'll hear, "Oh, it's broken, but it'll only take BAH to fix it." Eh...don't bet the ranch on that. Have a vendor come to actually cost the thing out. An inspector might tell you that the roof looks to be in bad shape, a roofer will tell you what all is involved in fixing and replacing it.
Home ownership is not cheaper or even a better investment than renting. It just isn't. You might get lucky and break even, or even pay it off and live in it forever. But some people really like being homeowners. They love the permanancy of it. Bless their hearts. If that's you, then just be informed and careful.
posted by Ruthless Bunny at 8:42 AM on November 3, 2014
Take your time and find a reputable home inspector. Don't pay much attention to the cost. You do not want John Doe's Bargain Home Inspections Co. who is 30% cheaper than a reputable option. We hired a guy who also has a radio call-in show, writes for the local paper, and has authored books for homeowners, and nobody had anything bad to say about him. He wasn't cheap, but he was very professional, took his time, and was correct on virtually every point. Worth every penny.
posted by jgreco at 11:58 AM on November 3, 2014 [1 favorite]
posted by jgreco at 11:58 AM on November 3, 2014 [1 favorite]
This thread is closed to new comments.
Not counting big but infrequent repairs (e.g., the sump pump and the boiler), I've generally found that about $2000/yr covers the following:
1) gardener to mow the lawn ($600)
2) snow plowing ($250)
3) minor things going kaflooey (e.g., replacing a lighting fixture) and other general handyman work: $200
4) unexpected bigger things going kaflooey (e.g., replacing a porch post): $400
5) updates (e.g., new toilet, new vanity, etc.): $550
posted by thomas j wise at 7:11 PM on November 2, 2014 [2 favorites]