During this spring, several people will turn into first-time home buyers. Most of them will run behind the numbers for their mortgages, property tax, a bit more for utilities.
Few of them will avail renovation loans that permit them to fit a fixer-upper for fine living, still several won’t allocate fund to meet the ongoing maintenance cost while planning for their new budgets.
Similar to several first-time home buyers, you will find lot to learn and experience great excitement, but one thing you may forget to consider while budgeting is allocating fund for home repairs.
It is really true that it creates lot of strain in your budget due to unexpected home repairs, still if you are well prepared in advance for those unavoidable costs will lead you to stay in peace of mind.
As per expert’s research, there are two distinct methods that you can try to estimate home maintenance costs and accordingly you can set up a successful budget to meet home repair costs.
Choice 1: The assessed – value method
Several experts advise to set aside approximately between 1 % – 4 % of the assessed value of the home every year for maintenance and repairs.
It may costs higher end for maintaining those homes which are remotely situated such as island homes, those homes that are aged or those homes that owns lavish features such as swimming pools.
If your home didn’t come under any of these categories, you can opt for 1.5% as set aside estimation value for repairing costs.
This approach is typically easy, but you may not be sure that it offers you complete peace of mind. Three major aspects that led us to take further a insight look at estimating actual home repair costs are
- Assessed values are generally not always correct.
- The value of the home can be affected by aspects that are totally unrelated to actual maintenance and repair costs such as the quality of the district school.
- The 1% – 4% range of savings rate estimated by experts left us with a few reservations.
Choice 2: Itemised project costs
Testing the home-maintenance budget accuracy requires figuring out the individual home repairs costs, and the lifespan of factors such as furnaces and paint jobs.
Here are some of the aspects you must consider as you put jointly a second estimation on the basis of itemized costs:
- If you live in a location with considerably high cost of living and hence service costs are not cheap.
- If your houses are considerably small may be within 790 square feet, so several repairs are relatively less expensive.
- You usually purchase your appliance “similar new” from an outlet store.
- Our dryer and washer are in small space, and may require a replacement with premium space-saver appliances.
A customizable solution
- A customizable solution is the one that you keep on update your saving goals on the basis of knowing your new requirements regarding your home.
- If you discover the roof must be replaced within a few years, you could change the lifespan of the roof and accordingly update your monthly savings goal. This approach is especially very helpful if you own an older home with many pressing repair requirements.