I’ve written a post about preventative maintenance, but I never actually presented concrete figures regarding just how much these costs can be. This email from my dad the other day was quite an eye opener.
Hey, just thought I would let you and [your wife] know, we got a programmable thermostat. I think we are really going to like it, but it sure was expensive. It was a little over $5,000, but I figure it was worth it as you and [your wife] should be able to sleep at night without the compressor on the old unit sounding like a diesel truck coming through the window. Oh, I forgot to mention we have a new heat pump. The old one finally gave out after 16 years. The really loud noise was a sign that it was about to go kaput and then it did. Anyway, we got it installed right before this cold front comes through tonight. So, we got lucky as far as the installation and the weather was concerned. Miss you both and consider it an invitation for ya’ll to come experience the quietness of the new heat pump.
Ouch. Since moving into our first home in November 2009, we’ve been putting away $100 per month for maintenance costs. So far, that account has covered our maintenance problems, but $5,000 would tap out that account about 5 fold at this point.
A common piece of advise is to plan to spend about 1% of your home’s value on maintenance costs each year. For example, if your home’s value is $500,000, you should plan to spend about $5,000 per year in maintenance costs. This is obviously just a starting point since $500,000 will go much further in some real estate markets than others.
From my personal experience, we haven’t spent anywhere near the 1% of our home’s value. But, we’ve only been here one year. My dad’s email has me considering upping our monthly contribution to our maintenance fund.
Time is money. We chose to move into an older home that was built in 1964. We knew going into the purchase that we would have to spend more time updating and maintaining that we would if purchasing a new home. We new that we would have to paint the interior and exterior, do some major backyard clean-up, and tons of “minor” updates such as replacing the electrical outlets near our kitchen and bathroom sinks with outlets that “test” and “reset” buttons and installing ceiling fans. Don’t understimate how much time it takes to maintain a home of your own.
Even if you love the outdoors, you probably have a full time job, maybe a wife and kids, and even a social life you would like to maintain. When you look up at the end of the day, you may realize that you just don’t have the time to go rake the leaves or mow the yard. Depending on the size of your lawn, you could end up paying $100 each month.
What are some other hidden costs you have encountered after becoming a home owner?