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How to budget for your home’s seasonal maintenance

Buying a home is largely considered to be one of the biggest financial commitments most people will undertake in their lifetimes. However, while achieving homeownership requires years of careful budgeting and saving, the need for financial prudence doesn’t end when you receive the keys. Keeping your home in great condition in the years to come will require putting those budgeting skills to good use with careful planning and allocation.

Here are a few best practices to follow to ensure you’ve got the funds you need to keep your home in tip top shape.

 

Be ready in the face of disaster

As a homeowner, it’s important to prepare for the unexpected as surprise repairs or replacements can be extremely costly. For example, repairing a basement flooded by a sewer backup or a roof damaged after a storm can run in the tens of thousands of dollars.

These emergency fixes may not always be covered by home insurance, or will require a deductible upfront; for this reason, it’s a great idea to contribute regularly to an all-purpose rainy day fund. Financial experts recommend this fund should have a minimum of three-months-worth of cash to cover life expenses, including mortgage payments, utilities, transportation, and food. Keeping a portion set aside solely for home repairs that may fall outside of your insurance coverage is a great way to prevent financial shock should the worst occur.

And, while house owners are most likely to foot the bill for weather- or age-related repairs, condo dwellers should also take care to save in the case their condo board calls for a special assessment, which can require each unit holder to pay thousands of dollars for their share of repairs or reserve fund shortfall.

 

Keep common expenses in mind

However, while it’s imperative to prepare for large-scale repairs, it’s the routine homeownership costs that can really eat into a budget and lead to racked-up debt. In the warmer months this can include, but isn’t limited to:

  • Refreshing your house’s exterior with paint or brick cleaning
  • Repairing cracked concrete in the driveway, paths, or home’s foundation
  • Clearing eaves troughs
  • Window and screen cleaning
  • Landscaping and the planting of annuals
  • Septic tank maintenance (if applicable)
  • Roof, fascia and soffit checkup and repair
  • Maintenance of HVAC system
  • furnace inspection
  • fireplace cleaning

Homeowners also need to take into account semi-regular big ticket replacement costs; while they may only be required every few decades, they require significant spend:

  • Roof replacement
  • Furnace replacement
  • Appliance replacement, such as washers and dryers, refrigerators, and stoves

 

How to create a budget for your home’s needs

With so many potential costs to keep in mind, how can homeowners proactively prepare a budget? There are a few key factors to consider to accurately estimate what you’ll need to spend.

The 1% rule: General advice suggests that homeowners can expect to pay between 1 – 3% of their home’s value on maintenance each year. For example, if your home is valued at $500,000, you can expect to pay $5,000 per year on its general upkeep and replacement costs. However, it’s important to keep in mind this should reflect your home’s value, and not necessarily its price in an inflated market.

Budgeting per square footage: If the above figure still seems high, another method is to assume you’ll pay $1 per square foot in your home, for example, a 1,500-square foot house will have an annual repair bill of $1,500.

However, it’s also important to take the following into account:

  • Your home’s age: Keeping a century-old home in good shape is drastically different than maintaining a new build, or even a post-war-era abode. Its level or required care will also be dependent on how well previous owners have maintained it over the decades. For example, if the home needs its vital systems to be brought up to code, such as replacing the plumbing or removing knob and tube wiring, that can be a considerably larger expense. Older homes may also have more advanced structural issues, such as aging foundations, that require more TLC and financial investment.
  • The weather: Those living in climates with snowy winters and wet springs will need to watch out for annual freezing and thaw damage, which can do a number on driveways, walls, and roofs.
  • Its potential for flooding: Is your home located in a floodplain? As the overall climate heats, rivers and lakes are more frequently breaching their barriers, leading to overland flooding scenarios. This can require specialized insurance as well as measures to keep water from flowing downstream into your property. However, even homes located on dry land can be suspect for sewer backup flooding, which can occur when municipal sewers are overwhelmed by an influx of rainwater. This is most common in older neighbourhoods, such as inner-city Montreal or Toronto houses; it’s smart to look into investing in a sump pump or backwater valve – expenses that will range around several thousand dollars – if your home is in a prone zone.

 

Penelope Graham is the Managing Editor at Zoocasa, a tech-first real estate company that combines online search tools and a full-service brokerage to let Canadians purchase or sell their homes faster, easier and more successfully across the nation, including houses and condos for sale in Toronto, Vancouver, and Calgary. Home buyers and sellers can browse listings on the site, or with Zoocasa’s free iOs app.

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