Posts Tagged ‘property value’

“How much money should I plan to spend on home maintenance?”

Wednesday, May 28th, 2014

“How much money should I plan to spend on home maintenance?” | Spruce Grove Stony Plain Parkland County Real Estate | Barry TwynamWhether you own your Spruce Grove, Stony Plain, Parkland County or Edmonton area home for months or decades, there will come a time when you will need to sell it. Wise home owners know that the value in their property, and their enjoyment of their home, can slide in a hurry if maintenance and repairs are neglected. What’s more, failing to deal with problems as they occur may result in much bigger, more expensive and more urgent repairs later on. That little patch of damp showing up on the ceiling today could lead to a major and expensive whole roof re-do in a few months.

Home maintenance and repair falls into two categories:

Minor ongoing repairs: Basic everyday upkeep includes replacing burnt-out light bulbs, oiling squeaky hinges on doors, tightening loose cabinet handles, repairing leaky faucets or slow drains, changing the furnace filter, patching the driveway, and a long list of things that need to be done to keep your property in show home condition. These pesky things are easy to ignore, but potential buyers will be unlikely to offer top dollar for a property with many small but visible faults.

Major once in a while repairs: The second kind of repair is needed when essential systems break down or wear out, sometimes without warning and at inconvenient times: the furnace quits, the sewer backs up, the hot water tank leaks, roof shingles wear out and no longer keep water from entering the house, wooden window frames rot out, the springs in your automatic garage door give out, and so on. If you live in your home long enough, you will probably experience all of these situations and others, and these items are often expensive to fix.

So, how do you go about budgeting for everything that will eventually need to be repaired or replaced in, on or around your home?

There are several methods to do this, but all involve setting aside a certain amount of money every year.

1. The 1% Rule. Reserve each year one per cent of the purchase price of your home (or the appraised value of your home as per your annual property tax assessment). Home valued at $350,000? Budget for maintenance costs of $3,500 annually. Maybe you won’t need to spend that much every year, but you’ll be glad you saved the excess year over year when the big catastrophic expenses hit.

2. The Square Foot Rule. Every year set aside $1 per square foot of finished space in your home. 1,200 square foot bungalow with finished basement? Budget for about $2,000 to $2,500 per year. You may also want to take into account the square footage of a garage, garden shed and the like.

3. The Systems Approach. More complicated but possibly more accurate than the previous two suggestions, this method is based on the 7 systems found in each home: outside structure, roof, foundation, plumbing, electrical, heating/ventilation/air conditioning (HVAC), drainage/landscaping. Consider all the minor maintenance and major repairs that could be done on each system and calculate an annualized amount for each. Luckily, this work has already been done by Romana King in her article “The Ultimate Home Maintenance Guide”, published in the magazine Money Sense. Her conclusion is that, depending on the size and age of your home, you should plan to budget $900 to $2,500 per year for basic maintenance, and an additional $3,500 to $7,300 for big items. This means annual cost of upkeep could range from $4,500 to $10,000 per year.

No matter how you calculate it, looking after your home can be costly. If you take care of minor repairs as they’re needed and plan ahead for the inevitable replacement of systems, costs will be spread out throughout the time you own your home. You’ll be able to enjoy your lovely home without worrying that the roof will, literally, fall in, and when it comes time to sell, your well-maintained home will return a good price.

Whether you’re looking to buy a pristine new home with nothing to do but move in, or you’re a handyman looking for a fixer-upper, I can help! Call or text me at 780-910-9669, email me at barry@barryt.ca, or contact me here.

Barry Twynam, Realty Executives Leading
#1 14 McLeod Avenue, Spruce Grove, Alberta, T7X 3X3
Tel: 780-962-9696 Cell: 780-910-9669 Fax: 780-962-9699
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