Purchasing a house is the most significant financial investment most of us will make, whether it’s the first or just the latest in the climb toward that dream home. Prices, at least in the hottest markets, are rising, but no matter where you live, deciding whether you can afford those new digs takes some careful calculation. Your real estate agent, your auto mechanic and your father’s irritating third cousin will not hesitate to tell you that you have to figure in property taxes and insurance payments when you’re determining affordability. However, as you’re coming face to face with the reality of how much your castle will cost you, don’t overlook something that is often relegated to a homebuying afterthought – maintenance.
You’ve probably come to terms with what a lawn service will cost or maybe how expensive those water softener filters will be, but can you commit to saving 1%-4% of your home’s purchase price every year? According to a report by Glasshouse, Inc., a California-based home maintenance service provider, that’s how much Americans should save, on average, every year, to cover both short-term and long-term home maintenance costs. For those of you sporting those I-love-this-house-I’m-in-no-matter-what blinders, that shakes out to $2,000-$4,000 each year for a $200,000 home. But Glasshouse is simply echoing what organizations like the National Association of Realtors have long implored buyers to take into consideration. In fact, just this month, Realtor, the NAR’s membership magazine, named home expenses, like maintenance, as one of the things that homebuyers overlook the most.
Glasshouse Founder Shannon Bloemker said since houses are assets, it’s important for homeowners to make ongoing investments in them so that they continue to appreciate. Neglect the maintenance that every home requires, she said, “and it won’t be worth what you think it’s worth.” In another Realtor article, delayed home maintenance is identified as a common reason some properties take longer to sell.
Of course, your home maintenance bills will depend on the type of house you buy. Thinking about a starter home that you know will be maintenance-heavy? You’ll want to save at the higher end – or more – of the 1%-4% range because you might be looking at major replacements a little earlier than if you bought a new home. The same goes for a custom smart home with the latest gadgets. With proper maintenance, you should get a long life out of your systems, but you’re still looking at a hefty bill if they break or become obsolete.