Whether you live in an older home or a newer build, a good rule of thumb is to set aside about 1 percent of your home’s value for maintenance costs each year. However, this number can vary depending on your home’s age and other factors. Most of the time is not realistic for many families.
Fortunately, there are many strategies you can use to reduce the cost of maintaining your home.
Preventive Maintenance
A key strategy to reducing maintenance costs is conducting preventive maintenance. This is a set of processes that ensure equipment is inspected and tested regularly to minimize breakdowns. It’s a great way to reduce downtime and extend the life of your assets.
Some preventive maintenance tasks, like yearly gutter cleaning and HVAC tune-ups, cost money up front but can save you a lot in the long run. Others, such as replacing the batteries in smoke detectors and washing your windows can be done yourself at a fraction of the cost of hiring professionals.
Regardless of how you perform your preventive maintenance, it’s important to keep an emergency fund on hand. It’s recommended that homeowners set aside 1% of their home’s value each year for unexpected repairs and maintenance needs. This can help offset the cost of a sudden repair or replacement that may not be covered by your insurance policy. A stitch in time saves nine, after all.
Repairs
While some home maintenance tasks, like yearly gutter cleaning or termite inspections can be planned ahead of time and cost little to nothing, many repairs are unpredictable. Some experts recommend setting aside 1% to 2% of your house value each year for these expenses.
For example, if your home is valued at $400,000, you might plan for annual repair costs of $4,000 to $16,000. That is in addition to your mortgage payment!
The good news is, there are a few ways to reduce these unplanned costs. For instance, it is recommended to get estimates for larger home maintenance projects before hiring a contractor. Getting several quotes will ensure you are paying the best price possible for the work. Also, completing repairs as soon as you notice them can help save money. For example, if you have shingle damage from a recent storm, repairing it quickly can avoid bigger problems down the road. It is also important to consider the complexity of your home when attempting to reduce upkeep costs. Every new feature you introduce, from complex landscaping to high tech appliances, will require additional upkeep.
This is a reason why many homeowners opt for home warranties to provide them a peace of mind against home repairs. A home warranty can provide coverage for HVAC systems, kitchen appliances, and others. Every company is different so you will have to check with each company on their coverage. A home warranty company can offer a lot of benefits. Be sure to check out each company individually and check the experience and reviews for each company.
Replacements
One of the best ways to protect your home and save money is to perform regular maintenance. This will help ensure that your house stays in good condition and reduce the need for costly repairs down the road. This can include everything from cleaning gutters to replacing light bulbs. It’s also important to do your homework when buying a new home, as some homes require more maintenance than others.
Typically, homeowners should set aside 1% to 4% of their home’s value each year for maintenance costs. However, this estimate can vary based on a number of factors, including location, the age and condition of the home, and whether or not you live in an area that experiences severe weather or is near water. If you’re not sure how much to budget, consider using the square footage rule, which recommends saving a dollar for every square foot of your house each year. This is a great way to avoid over or underestimating your annual maintenance needs.
Insurance
Insurance is a vital part of owning a home. It covers the cost to repair or replace your home and personal property if a covered event occurs. It’s important to compare quotes from different companies. You may be able to save by combining policies with the same company that you use for auto or health insurance. Often, insurance companies reward loyalty with reduced premiums for homeowners.
Enhanced Safety
Insurers require regular updates and maintenance for the roof, electrical, plumbing, and HVAC systems to minimize hazards that might lead to accidents or expensive claims. Proactive maintenance also helps ensure that minor problems are addressed promptly and do not escalate into major repairs or replacements.
Another way to reduce insurance costs is to take steps to make your home safer and more secure, like dismantling a trampoline or installing a burglar alarm system. In some cases, insurers offer discounted rates for these home improvements, which can offset the cost of a higher deductible on the policy.
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