Yearly maintenance budget

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Lily left the valley
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Yearly maintenance budget

Post by Lily left the valley »

So I found some interesting videos on Youtube about inspecting older homes, and one thing I had been trying to find some figures on before but hadn't really was how much to budget for maintenance per year. I kept finding stuff on much newer homes, which I found fairly useless. I bring both these topics up because one of those inspection videos talks about just that.

This is of particular interest because it's our first year, and we know that although our home was well maintained for many years, for the last handful or so, not so much. I also keep the books in our house, so it's my job to budget well.

This one video (made in 2013 in case it matters) I'm watching says 1% of the purchase price for an older home that has been maintained, but isn't necessarily updated. In the video, he uses $250,000 as his example for the math (The speaker is from Oregon.) He uses this number because he says a home that's been maintained sort of has its own cycle of when certain things will go. So if you are going to continue that cycle, that's roughly going to be what you're dealing with. He then goes on to say if that number seems high, think about how often a furnace or roof needs replacing, and the averages are pretty spot on so long as they don't happen too close together close to your purchase.

For us, that doesn't seem like much because of what we paid--so only $1000. Technically, we'll spend that insulating the attic this year, which isn't really maintenance even though doing so will help maintain certain things.

Now, if I look at Redfin, they say our home is worth $198,837, so that'd be twice the budget. I'm thinking that'd be a better baseline to work from.

How did folks figure out what to budget? How close were you?

Your :twocents-twocents:, please.
--Proud member of the Industrious Cheapskate Club
--Currently pondering ways to encourage thoughtful restovation and discourage mindless renovation.

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Corsetière
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Re: Yearly maintenance budget

Post by Corsetière »

Good lord, that seems impossible. I mean I can't imagine a point where things will be stable enough here that I could even guess at budget for maintenance! Guessing based on the value of the house seems really weird, too. I mean, I paid next to nothing for my house in comparison with the area, my house is just as large and the same era so......

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Lily left the valley
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Re: Yearly maintenance budget

Post by Lily left the valley »

Corsetière wrote:Good lord, that seems impossible. I mean I can't imagine a point where things will be stable enough here that I could even guess at budget for maintenance! Guessing based on the value of the house seems really weird, too. I mean, I paid next to nothing for my house in comparison with the area, my house is just as large and the same era so......
Yeah, it really is a puzzle and a half for guess work. Especially because I keep finding little bits that are just making themselves known as "needing attention", like a very slight leak on a hot water pipe seam just above the washer. Had it not been just above, I might not have realized for a while.

I knew we paid below tax assessment even, though that isn't as much as what Redfin quoted. So that's why I figured the Redfin was better as a base.

I'm not going with bigger projects like taking the siding back to wood, just actual maintenance stuff. Of course, that then begs the question...if the porch has a lean and needs holes dug for proper footing and same made, is that maintenance?

:crazy:
--Proud member of the Industrious Cheapskate Club
--Currently pondering ways to encourage thoughtful restovation and discourage mindless renovation.

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JacquieJet
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Re: Yearly maintenance budget

Post by JacquieJet »

I feel like this is a tough one, because sometimes (and more often than I'd like), it seems like we have unforeseen "oh shit" type maintenance (leaky roof, boiler system broke, ductless a/c fried) that has proven to be quite costly and also needing a fairly immediate fix. I guess that getting a dollar value for maintenance wouldn't include things that just pop up like that, but then again if you are saving for maintenance, I would think that it would be wise to think of things like that as well?
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JRC
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Re: Yearly maintenance budget

Post by JRC »

What are maintenance items: roof replacement, furnace replacement, repainting, (exterior and interior) appliance repair/replacement, cleaning/housekeeping?

I guess you'd try to predict how much those items will cost, when they will need done, and do the math to see how much you'd need to save each month to meet those projected costs.

Personally, I'm terrible at budgeting for maintenance. I'm mostly reactionary to problems that crop up. I've been lucky enough to get away with this, so far. But, I expect large hits to the credit card/home equity line of credit sooner or later.

1918ColonialRevival
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Re: Yearly maintenance budget

Post by 1918ColonialRevival »

I realized early on that it's very difficult if not impossible to make a budget and stick to it. There are just too many variables. You'll have good years where you are able to make progress on projects you want to do versus things that have to get done. Then there are the other years where all of your time, effort, and money is spent taking care of emergency repairs.

I typically try to come up with a "not to exceed" amount every year, but so far my success of sticking to it has only been about 50%.

Kansas.1911
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Re: Yearly maintenance budget

Post by Kansas.1911 »

And I'm back!
It has been about a year. This topic caught my attention. My first response is that of , "Budget? What is this of which you speak?"

For an old house, the 1% does not apply. So far, we have doubled the purchase price in the first ten years, giving that our house was "move in ready" (i.e. somebody moved out last month) as well as suffering from 20 years of deferred maintenance. Let's do the math: Purchase for $150,000; spent $150,000 in 10 years. It is impossible to maintain a house that you are trying to improve at the same time.

Then you have the cost of tools. What line item is that? If you have to buy it to work on your house, you are maintaining the house. If you hire someone with the tools, then the costs are included in the price.

We work backwards now. For example, we need to find a mason to have the chimney rebuilt. We also need a new HVAC. In an emergency, we could probably scrape up the money or find financing but I would prefer to set $5,000 per year aside until we have enough for these big projects. Those big projects are considered maintenance yet if we do them prior to the HVAC crapping out, would it be an improvement? If we upgrade to something higher-end, is that maintenance or an improvement?

The bottom line for us is that we get some money and we spend it on something that we've known about for ten years! We are just about at the end of the line where we aren't constantly thinking about what needs to be done next.

Here's an idea for you: Figure out how much you spent during year one maintaining your home, and list the future projects over a ten-year time-line. That's going to be a better guideline than a yearly maintenance budget.

All the best to you.
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Re: Yearly maintenance budget

Post by Olson185 »

JRC wrote:What are maintenance items: roof replacement, furnace replacement, repainting, (exterior and interior) appliance repair/replacement, cleaning/housekeeping?

I guess you'd try to predict how much those items will cost, when they will need done, and do the math to see how much you'd need to save each month to meet those projected costs.

Personally, I'm terrible at budgeting for maintenance. I'm mostly reactionary to problems that crop up. I've been lucky enough to get away with this, so far. But, I expect large hits to the credit card/home equity line of credit sooner or later.


Maintenance = cost to maintain what one has (tend to be expenses occurring on a fairly frequent -every 1-10 yrs- basis)
Replacement = cost to replace what one has (tend to occur once or twice over a 20-75 yr. span)
~James

Fourth generation in a family of artists, engineers, architects, woodworkers, and metalworkers. Mine is a family of Viking craftsmen. What we can't create, we pillage, and there's nothing we can't create. But, sometimes, we pillage anyway.

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Gothichome
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Re: Yearly maintenance budget

Post by Gothichome »

First off, good to hear from you Kansas, been a while. Look forward to update pics.
When we first bought Gothichome I budged 10K a year for have too's. For the first few years this got us modern upgrades from the tired old mechanicals/ electrics ect. Last year spent 2 years budget on the roof. Now our home is up to date and I should not need to spend any more $ on major projects and the home will stand for another 140 years. For the restoration details I think I can get away with $500 a year now. Is that a firm budget, nope, but each year's money averaged out over the next twenty years I believe $500 is quite do-able.
I don't think you can restore/renovate any old home on a strict budget,nope, but on average, over the long term I think a general feel for how much you will need for maintenance and repairs can be assessed.

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Lily left the valley
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Re: Yearly maintenance budget

Post by Lily left the valley »

Thank you for everyone's input on this. As first time home owners, let alone first time new old homeowners, budgeting for maintenance and repairs was one of my bigger concerns because the numbers can fall all over the spectrum.

So the practical experiences helps loads in at least imagining best and worst case ranges.
--Proud member of the Industrious Cheapskate Club
--Currently pondering ways to encourage thoughtful restovation and discourage mindless renovation.

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