Not a member?
or Register

The Savings Goal That New Buyers Often Miss: Home Repairs

When you are in the market for a new home, you know you have to budget for the down payment, utility transfers, furnishings, and other expenses. You may have even set aside some extra cash to upgrade the carpet, replace the kitchen cabinets, or redo the landscaping. However, one thing that many new homebuyers fail to do is establish a home repair fund. Keep reading to discover why this is important and how much you should be saving each month.

 

Financial Disaster Diverted

 

According to HomeAdvisor, the national average for a major home repair is $10,405. While having an extra 10 grand on hand is certainly something you should aspire to, the reality is that it’s not very easy to quickly put back this much money. Starting your home repair fund, however, can help you plan for any unexpected expenses so that you aren’t struggling to pay the bill when facing a natural disaster or system failure.

 

In addition to keeping some money set aside for emergencies, your home repair fund can help cover maintenance costs. Generation X Finance maintains that things like irrigation system maintenance, lawnmowers, and other tools are necessary buys, and they can add up fast. And it’s not just the little things you have to worry about, either. If your home’s roof is more than 12 years old, there’s a good chance you’ll be replacing that soon. Lead or galvanized pipes? You can almost guarantee that there is at least some corrosion or internal damage.

 

A good rule of thumb is that your home repair budget should equal approximately 1 percent of your home’s value per year. For instance, if your home is valued at $250,000, you should plan to set $2,500 into a special account annually. While you may not use that by December 31, you can count on home repairs and maintenance costs evening out over the span of several years. While one year you may only spend $1,000 on home upkeep, you may spend $5,000 or more the next. Discover.com notes that you can calculate your potential budget by looking at your property tax, mortgage, and insurance payments and saving 10 percent of that each month.

 

Save Money on Repairs

 

Obviously, when you maintain your home, you run less of a chance of running into major repairs. However, at some point, you are likely going to have to pay for an extensive project. Whether it’s having a new deck installed, repairing the foundation, or adding an extra room, it’s important to vet potential contractors. A bad contractor will instill a sense of fear, claiming that your repairs are urgent. They won’t offer a warranty, and the worst will intentionally (and covertly) damage your home so you will feel obligated to keep them on site to make additional repairs. Earl’s Plumbing suggests sticking with local businesses that stand behind their work. In other words, research your contractor’s reputation before you write them a check.

 

Make sure to get multiple quotes for each project. You may find that, even among great contractors, they have a different idea of what completes the project. Your contractor should be up to date on and willing to comply with local codes. For instance, if you plan to install a swimming pool, there are state regulations you must follow, but each city may also have specific zoning rules when it comes to alarms, barriers, and gates. If your contractor fails to meet any of these codes, your project will stall, and you will have to satisfy the missing requirements.

 

From saving the right amount of money to choosing a contractor, there are ways to ensure you don’t overspend or get in over your head when it’s time to make any home repairs or upgrades. So, whether this is your first house or your fifth, remember that it never hurts to plan ahead. If disaster strikes, you’ll be glad you did.

 

Image via Pixabay

Post a Comment