Never Underestimate Maintenance Costsby Tim Manni
Between those oh-so-low mortgage rates and the decline in housing prices, that timeless real-estate slogan is true: there may never be a better time to buy a home than right now. However, if you’re looking to buy a home (or even an automobile), you shouldn’t shop based just on the monthly payment. It’s the maintenance costs that can, well, cost you.
The experts say borrowers should allocate at least one percent of the home’s total value each year for maintenance. Some suggest even budgeting up to four percent:
The ranges are 1-4%. For a home worth $200k that would be $2000 to $8000 per year. This is much higher than what I’ve actually spent myself. But this broad range might reflect the wide differences between new and old homes and between well maintained or run down homes.
First-time homebuyers, especially former renters, should be prepared for what can be an eye-opening revelation. Personally, I still rent an apartment. Sure I’d love to own a home one day, but last month when my fridge gave out, I was only saddled with the responsibility of re-stocking my freezer, not shelling out the $600 it cost to replace it.
Homeowners must have enough funds set aside to cover both routine and emergency repairs. Using the Roofing Estimator at ImproveNet.com, the cost of a new roof can cost upwards of $4,000.
Finally, if you’re considering a home improvement project in order to add to the value of your home, be sure to check out this link.