Buying a home is an exciting event for a young couple. Careful planning and saving ahead of time is wise, as unexpected costs often pop up. Estimating how much money to save each month depends on what repairs you'd like to complete after purchasing the home, required repairs you expected to perform in the near future, and the average annual maintenance and repair bills based on the home's age and upkeep.
Estimating Home Repair Costs
Homeowners should typically plan on spending between 1 and 3 percent of a home's purchase price on regular annual repairs and maintenance. On a $300,000 home, set aside at least $3,000 annually, or $250 from your monthly income, for ongoing home repair in addition to mortgage and property tax payments. Many purchasers also choose to make repairs when first buying a home. The monthly amount for such repairs varies greatly depending on the extent of the repairs and the age of the home.
Repairs vs. Maintenance
A thorough home inspection prior to purchase will give you a more accurate idea of potential repair costs. In addition to setting aside some money each month for ongoing home maintenance, homebuyers should budget carefully for more expensive projects. Common costly repairs include replacing a roof, fixing cracked foundations, replacing or repairing wooden decks and updating old electrical or plumbing systems. These projects cost anywhere from $1,000 to $30,000 depending on the size and extent of the job.
Age of Home
Newer homes usually require fewer annual repairs in the first few years of ownership than older homes do, unless you are purchasing a recently renovated home. Most roofs and appliances have life expectancies of about 15 years, and heating, ventilation and air conditioning units usually last between 15 and 20 years. When viewing older homes for purchase, consider the cost of replacing these items if required, as well as any necessary renovations to meet the current building code.
Savings and Credit
Some homeowners neglect to save monthly for future repairs and underestimate the importance of regular home maintenance. Doing so is costly, as ignoring needed minor repairs can result in extensive and more costly renovation jobs. While you may qualify for a home equity line of credit to finance more expensive projects, the overall cost of the repair increases as interest charges accrue. Start setting aside money monthly to cover both regular home maintenance costs and future repairs.
A former financial adviser with more than a decade of experience in personal finance and small business banking, Sarita Harbour is a professional writer specializing in personal finance, small business, technology, and content marketing techniques. Her writing appears online at sites such as Yahoo! Homes and Bob Vila. Harbour holds a bachelor's degree in psychology and computer science from the University of Guelph and the Personal Financial Planning designation from the Institute of Canadian Bankers.