Triangle Area Real Estate News & Information

How much should you set aside for home repairs? Most experts recommend setting aside anywhere from 1% to 3% of the purchase price of your home each year to cover maintenance. Keep in mind that a home is a long-term purchase, and these annual reserve figures represent an average. Therefore, for example, if you set aside 3% of the purchase price of your home during the first year and you don’t end up using much of the money, you would be wise to continue setting aside the same amount in subsequent years. Many home repairs are expensive and can come as a nasty surprise if you haven’t prepared yourself financially. Any homeowner who has ever had to replace a roof can attest to this!

Variables That Factor Into Estimating Home Maintainence

Exactly how much you need to set aside can vary based on a number of different factors:

• Age and Warranty – if you’re buying new construction and/or if you have purchased a home warranty, you will most likely be safe on the low end of that scale, but you should still keep some cash on hand. Home warranties generally cover most major problems, but do not assume that everything will be covered. If you buy an older home, you should plan more conservatively.
• Type of Dwelling – if you live in a condo or townhome, your repair costs will be lower since the owner association will assume some of the responsibility for maintenance. If you buy a detached single family home, plan on setting aside a higher amount. (See also: >What’s the Difference between a Townhome and a Condo—and Does it Really Matter?)
• Land/Environment – Drainage issues can create expensive problems over the long haul. The land surrounding a house should be on a minimum 5% grade (running downhill away from the house). If you see water pooling near the foundation, you may need to have an expert look at this. Finally, homes with basements are prone to structural problems due to the soil composition in North Carolina as well as many other areas in the South. (See also: North Carolina Soils and Their Impact on Foundations)
• Condition – it’s important to not only identify current problems, but also to get a sense of what repairs will likely be needed after a few years. A good home inspector can look at the major components of a home and let you know which ones are most likely to need repair or replacement soon. Be sure to get a solid referral for a home inspector; there are many who take shortcuts. You need to work with an inspector who will do a thorough job.
• Climate/Temperature – if you live in an area where it’s humid during the summer or where temperatures will routinely fall below freezing during the winter, this can significantly affect home maintenance costs.

A Home's Major Areas of Repair

The need for home repairs can pop up in countless places, but there are a few areas where the majority of repair costs are likely to arise. The roof and the foundation tend to be the two most expensive items in a home. Major appliances also need maintenance and periodic replacement, including central heating & air units. Gutters are critical as well, as these affect drainage. If you have a porch, deck or fence, these will eventually need repair. Determine as best you can the life expectancy of each major appliance and make sure to stay on top of recommended preventative maintenance. Being proactive rather than reactive can make a huge difference in how much repairs cost you. (See also: “The Bones of a Home” – What Does This Mean?)

If you are considering buying a home, make sure to inform yourself about the full cost of major maintenance. Failing to budget adequately for home repairs is a common cause of financial strain. As always, the key is to work with solid and reputable professionals. My partner, Andrew Palumbo and I have a background in construction, which is one of the most important ways that we help our buyers and sellers. We have both spent countless hours at construction sites in the 25 years that we have been in business. We have learned to quickly identify red flags and maintenance issues with a home.

If you are planning to buy or sell a home in the Triangle area, give us a call today and let us put our experience to work for you. Send us a message online or give us a call at 919-659-5173.