We are in love with our home. I know, I know—you’re not supposed to get emotional about a house for any number of reasons. But we just can’t help it. It was built in 1975, and has some character to it that we could not find with newer homes on the market. Our backyard is teeming with plant life, from the blossoming lemon tree we planted as newlyweds almost two years ago to the beautiful hummingbird vine that was here from the previous homeowners. We grill, we weed, we host friends and family; life is pretty good.
But homeownership is not all lemonade and hummingbirds; it comes with financial responsibilities. A figure you will hear thrown around is that you should expect to spend around 1%-3% of the home’s value each year on maintenance. This is above and beyond the down payment, mortgage, insurance, and property tax. It seems fitting to discuss our own experience with this while a plumber is downstairs cutting a hole through our living room ceiling. I just took a peek, and was slightly horrified when he peeled back the soggy plaster where dry, coarse material should have been and a gush of water hit our floor. The grim news is that it will cost an estimated $700 to fix (that is unless we want to leave a 5 gallon bucket where our coffee table should go). The good news is that we listened to the experts and have purposefully built up an emergency fund/house fund to deal with issues such as this.
To give you an idea of our own experience with home maintenance and repair costs, here’s a breakdown for our last two years of homeownership:
- Year One: Landscaping after hard freeze kills all of our front bushes and other vegetation ($150), A/C unit replacement (approximately $3,500 out of pocket after tax credit and home warranty), chimney cap installation ($450), replaced garbage disposal ($100), soaker hoses ($30) (Total: $4230, 2.5%)
- Year Two: Foundation repair ($3,500), plumbing repair ($835 in total), washer replacement ($385), broken dishwasher (not repaired/replaced yet) (Total: $4720, 2.8%)
I am not writing this to scare you away from homeownership, or even necessarily to complain about our plumbing bill. Rather I am taking the opportunity to show you how an emergency fund and house fund for maintenance/repairs is a must have when you figure out your expenses and determine whether or not you are ready to own a home. Having one of these is not a nice suggestion from current homeowners that is meant to deter you from owning your own home. Rather it’s solid advice.
As a homeowner, have you found the 1-3% maintenance and repair costs to be accurate? Do you have a house fund/emergency fund?
P.S.: FMF does a great job of outlining the best cash reward credit cards available at this time. If you are financially disciplined, and pay off your balance each month, then you could use a card for home repairs and maintenance in order to get a small discount!