Tuesday, May 3, 2011 Budgeting for home maintenanceby Nadia Doucet on Tue, May, 3, 2011 08:56 PM
It's important for home buyers to know that all homes-old or
new-need ongoing maintenance.
First, buyers should understand the 1% rule. This rule postulates
that normal maintenance on a home is about 1% of
the value of
the home per year. For example, a $250,000 home would
require $2,500 per year to maintain. This would be enough
to replace the
roof covering...and then, a few years later,
to replace a failed hot water tank...and then a few years more
until a new central air system is
required.
Then there is the 3% rule. Some experts say that
home buyers should plan on spending 3% of the value of the home in the
first year of ownership. This is because new homeowners will most likely
have to buy drapes, blinds, a washer and dryer, a stove, maybe even a
new roof covering. Also, new homeowners often customize the environment
to their taste, so they need to budget for repairs, replacements and
maintenance.
In addition, most home components have fairly
predictable life cycles. For example, the typical life cycle of a
high-efficiency furnace is 15 to 20 years. What this means is that most
high-efficiency furnaces last between 15 and 20 years.
One way to know the extent of the maintenance
needed and the costs to repair and/or replace items is to have a home
inspection conducted. Home inspectors are required to let the buyer know
if a component is significantly deficient or if it is near the end of
its life cycle (service life), and a reputable home inspection company
may offer up-to-date repair-cost guides to help clients with their
planning.
Home inspectors work with Realtors and buyers to
help them understand the issues that are found in the home, regardless
of age, offering the right perspective and objective information. Home
buyers need to understand that it's normal for items in a home to wear
out. This should be regarded as normal "wear and tear" and not
necessarily a defect.
A good home inspection determines the current
condition of the house, offering a report of all the systems and
components in need of maintenance, service, repair or replacement.
For example, consider a home inspection that
uncovers that the heating system is old and requires replacement. A home
buyer may see this as a huge problem. However, this problem may be the
only item in the home that requires attention. If a buyer were to look
at this situation in perspective, this home could be well above
average-a home merely requiring a new furnace.
A good home inspection provides objective
information to help the buyer make an informed decision. Knowing what
items need to be budgeted for repair or replacement will help home
buyers plan or negotiate better and not be stuck with unexpected costs
of hundreds, or even thousands of dollars in the long run. Also, fixing
these items will make a marked improvement on the performance of a home
and minimize issues that could affect its future integrity...and value.
For more information, please contact your local Pillar To Post home inspector.
|
|
