How Much You Should Budget for Home Maintenance
It's impossible to predict exactly what maintenance your home will need, how much it will cost, and when it will become necessary. Average homeowner costs can be helpful, but averages are only a starting point for your home's annual maintenance budget and don't take into account your unique circumstances. You must calculate the personal factors that may increase or decrease your maintenance costs on an annual cycle, including the location and age of your home, the weather in your area, and the home's general condition.
According to a report from Home Advisor, homeowners spend an average of $1,105 on annual maintenance, and more than 30% were forced to complete an emergency repair at some point during the year (with emergency repairs costing an average of $1,206).
Factors to Consider
A home built within the past decade will likely need very little maintenance, while homes built 10 to 20 years ago will need slightly more. When maintaining an older home, there’s a statistical likelihood that major structural components, such as the roof, siding, or plumbing, will need maintenance or replacement in the future.
For example, according to the International Association of Certified Home Inspectors, sealants and stains can last anywhere from three to eight years, cultured marble countertops have an average lifespan of 20 years, and carpeted flooring will only hold up an average of eight years.
Homes in climates affected by large variations in temperature and humidity, ice storms, or heavy snowfall are subject to more strain than homes unaffected by cold weather. Similarly, homeowners living in climates that experience high winds, heavy rains, and other extreme weather conditions should expect greater environmental attrition on their structure.
A home maintenance budget should also consider as many topographical, geological, and biological variables (such as adjacent floodplains, trees, or termite infestations) as possible.
The older the home, the more impact a previous owner’s care (or lack thereof) will have on the home's annual maintenance budget.
The 1% Rule
Calculating average costs gives you a starting point for building your home maintenance savings, and real estate rules-of-thumb can provide additional guidance. 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.
This popular rule has its limitations, of course, as market fluctuations can dramatically impact home prices, without accounting for the general condition of homes within the market. If you bought your home at the peak of a housing bubble, your maintenance costs wouldn't be dramatically higher than if you bought at the bottom (although the price of materials and labor do inflate and deflate with real estate trends).
The underlying price of your home and its repair costs, in other words, are independent variables. The 1% rule provides a safe estimate for maintenance savings and considers the market, the physical size, and overall condition of your home at the time you purchased it.
The Square-Foot Rule
Another practical estimate is to budget $1 per square foot for annual maintenance and repair costs.
This rule is slightly more consistent 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—but keep in mind that this rule doesn’t take into account the specific cost of labor and materials in your area. The market prices for contractors and building materials can vary significantly from region to region.
Fine-Tuning Your Calculation
Since there’s no singular rule to govern how much you should set aside for annual home maintenance, consider an approach that incorporates each of the elements mentioned above.
First, take the averages 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've decided how much to reserve for annual home maintenance, set up automatic monthly transfers to a dedicated savings account.
Finding Maintenance and Repair Funds
It's not always possible to stash money away for your annual maintenance fund, and if you're facing an emergency repair, you might find yourself scrambling. Home equity loans can help homeowners fund necessary maintenance when it's least expected. Also, many local governments offer weatherization assistance and home repair programs for low-income and aging residents, especially in disaster-prone areas. Your tax dollars fund these initiatives and you shouldn't hesitate to reach out for assistance during an emergency.
HomeAdvisor. "State of Home Spending." Accessed Feb. 19, 2020.
International Association of Certified Home Inspectors. "InterNACHI's Standard Estimated Life Expectancy Chart for Homes." Accessed March 3, 2020.