How Much You Should Budget for Home Maintenance

Remodeled kitchen paid for using the owners home maintenance savings budget.
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It's impossible to predict exactly what maintenance your home will need and how much that maintenance will cost. Average homeowner costs can be helpful, but averages are only a starting point. You may also want to consider factors that might increase or decrease your maintenance costs. These factors include the location of your home, the weather in your area, the age of the home, and the home's general condition.

Homeowners spend an average of $1,105 per year on maintenance, according to a report from Home Advisor. The report also found that one in three homeowners completed an emergency repair. Emergency repairs cost an average of $1,206. These numbers can give you a ballpark idea of how much to set aside for home maintenance and repairs, but you may want to look at other calculation standards as well.

Factors to Consider

Many factors have an impact on the cost of maintenance and repairs for a specific house. For example, the age of a property can play a huge role. A new home built within the last five to 10 years may need very little maintenance, while homes 10 to 20 years old might need slightly more. Once a home turns 20 or 30, there’s a good chance that major components, such as the roof, may need to be replaced.

Homes in areas affected by freezing temperatures, ice storms, or heavy snowfall are subject to more strain than homes in areas unaffected by cold weather. Similarly, homes in areas where termites or other pest infestations, high winds, heavy rains, and other extreme weather conditions are common experiences may have more wear and tear.

Some homes are more than 100 years old but are in pristine condition thanks to previous generations exercising careful maintenance. Other homes may have been neglected and shoddily repaired over the years. The older the home, the more impact a previous owner’s care (or lack thereof) will have had on the home's condition.

Environmental stresses like being in a floodplain or at the bottom of a hill that collects water can also impact the amount of care and maintenance a home needs.

The 1% Rule

Average costs can give you a starting point for building up your home maintenance savings. It can be a challenge to decide whether you should set aside more, given the age, location, and other factors impacting your home. Rules of thumb can give additional guidance. For example, one popular rule says that 1% of the purchase price of your home should be set aside each year for ongoing maintenance. For example, if your home costs $300,000, you should budget $3,000 per year for maintenance.

Of course, this popular rule has its limitations. Market fluctuations impact home prices, which have nothing to do with the condition of your home. If you happened to buy your home at the peak of the housing bubble, your maintenance costs wouldn't be higher. The underlying price of your home and its repair costs, in other words, are independent variables. The 1% rule gives you an estimate and reflects the size and condition of your home, but since your home price is about more than the condition of your home, it may not be the most accurate guideline.

The Square Foot Rule

Another rule of thumb is that you should budget $1 per square foot per year for maintenance and repair costs. If you own a 2,000-square-foot home, for example, budget $2,000 a year for maintenance and repairs.

This rule makes slightly more sense than the 1% rule because it's directly related to the size of the home. The more square feet you’re managing, the more you’ll need to spend. However, one drawback to this rule is that it doesn’t account for labor and material costs in your area. The market prices for contractors, labor, and building materials can vary significantly from region to region.

Fine-Tuning Your Calculation

Since there’s no universal rule that governs how much you should set aside for home maintenance that factors in age, the home's condition, local weather, and the type of home, it makes sense to take a more holistic approach to estimate the cost of home maintenance. Here's one approach that incorporates all of these elements.

First, take the average of the 1% rule and the square foot rule. If 1% of your purchase price equals $3,000, and the square foot rule equals $2,000, then your average is $2,500.

Next, add 10% for each factor (weather, condition, age, location, type) that adversely affects your home. If you have an older home, in a floodplain, and in an area that experiences freezing temperatures, increase the total by 30%: $2,500 x 1.3 = $3,250 (or $270.83 per month).

Once you decide how much to set aside, consider setting up an automatic transfer to savings. This can help you make sure you don't spend your home maintenance funds.

Finding Maintenance and Repair Funds

In an ideal world, everyone would be diligent about setting aside money for home maintenance. That's not always possible. Other expenses come up, and if you have an emergency repair, you might find yourself scrambling. Home equity and personal loans can help. Many local areas offer weatherization assistance and other home repair programs for low-income or older residents. If you need assistance, don't hesitate to reach out to these programs.

Article Sources

  1. HomeAdvisor. "State of Home Spending." Jan. 11, 2020.

  2. Consumer Reports. "Roof Buying Guide." Accessed Jan. 11, 2020.

  3. USA.gov. "Repairing and Improving a Home." Accessed Jan. 11, 2020.