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Tuesday 26 July 2022

How to budget realistically for home

repairs

nance, Fisher says. Those
amounts typically ranged
between 0.5% and 1% of
their home's value. In ad-
dition, homeowners spent
an average of $2,321 on
emergency repairs.
Fisher recommends hom-
eowners set aside up to 5%
of their incomes for home
maintenance as well as
$10,000 to cover emer-
gency repairs and system
replacements.
Another approach is to
save based on the remain-
ing lifespan of your home's
This undated file photo provided by NerdWallet shows Liz Weston,
a columnist for personal finance website NerdWallet.com. various components, in-
Associated Press cluding the roof, the heat-
ing and cooling systems,
By LIZ WESTON under Florida's harsh sun, the hot water heater and
NerdWallet he says. Extreme weather appliances.
If you're a homeowner and events can wreak havoc You can search online for
haven't faced a big repair on homes as well. charts and articles that es-
bill yet, just wait. Even in the How well you maintain your timate how long compo-
best-maintained homes, house also can have a nents typically last, Wessling
stuff will wear out or break. big impact, Wessling says. says. Similar searches can
Budgeting for these inevi- Many homeowners don't give you an idea of re-
table bills isn't always easy. notice window caulking placement costs. Alterna-
One commonly cited rule that dries out and splits, tively, hire a home inspec-
of thumb — to save 1% to for instance, but the water tor to conduct a home
4% of your home's value that seeps in can cause maintenance inspection,
each year for mainte- enormous damage. Wessling says. Like the in-
nance and repairs — can "What might be a $12 or spections that precede a
give homeowners sticker $15 repair could turn into home purchase, a mainte-
shock as real estate prices spending $15,000 or $20,000 nance inspection can esti-
soar. to rebuild that wall below mate when various home
Accredited financial the window," Wessling says. systems likely will need to
counselor Kate Mielitz re- Homeowners spent an av- be replaced. Wessling says
cently purchased a home erage of $950 on home he typically charges $400
in Olympia, Washington, maintenance — or 0.6% to $500 for inspections.
where the median listing of the home's value — in Let's say you have a 5-year-
price is $540,000, accord- 2019, according to the old air conditioning system,
ing to Realtor.com. Saving latest American Housing which typically have life
even 1% of that, or $5,400, Survey conducted by the spans of 15 to 20 years,
would be a stretch for U.S. Census Bureau. But the Wessling says. If a new sys-
many owners, says Mielitz, amounts varied consider- tem would cost $4,000, you
who advises low- to mid- ably based on home sizes might save $400 a year to
dle-income clients. Saving and age, among other cover it. You could add a
4% would mean putting factors. For instance, the fudge factor to account for
aside $21,600 a year. percentage of a home's future inflation, which is, un-
"I want to cry just looking at value spent on mainte- fortunately, unpredictable.
that number," Mielitz says. nance rose from 0.2% for Wessling suggests adding
HOME COSTS DEPEND ON homes built in the 2010s to 20% to the expected cost
AGE, CONDITION, CLIMATE 0.8% for homes built before and an additional $100 a
Rules of thumb have limit- 1960. year to your savings.
ed value, though, because DECIDING HOW MUCH TO OTHER WAYS TO PREPARE
how much you spend of- SET ASIDE FOR HOME COSTS
ten depends on the age of People who prefer to hire Consider setting up a
your home, materials used others should expect to home equity line of credit
and local climate patterns, spend more than do-it- that you can tap if repair
among other factors, says yourselfers, says Mischa bills exceed what you've
John Wessling, president Fisher, chief economist saved. These lines of credit
of the American Society of for home services referral tend to be less expensive
Home Inspectors. website, Angi. Angi's survey than many alternatives,
For example, a laminated- of 2,934 homeowners who such as credit cards. Just
shingle roof may last 35 to paid for home improve- be sure you can make the
40 years in St. Louis, where ments last year found that payments: If you don't, the
Wessling lives. But it could they spent an average lender can foreclose on
survive less than 15 years $3,018 on home mainte- your home.q