surfer1 wrote:In the price range of 500-700k, I would think you're getting a house within 0 - 20 years old? If so, maintenance should be on the lower end. Maybe < $100/month, if even that. Think small repairs and lawn service. If the house is 10 years old, check the water heater date, roof age, heater/ac age, and any motor device ages (sump pump, septic, etc). You really get into higher maintenance when the house is about 50 years old. At that point, expect $200+/month in small to moderate repairs (toilet flanges, electrical outlets, cracks, wood, pests, etc). It's helpful if you're handy - a trip to home depot can cut down on costs vs a call to the repair man. Either way, $500-$1000/month is much too high for maintenance, that's practically rent!
Aptenodytes wrote:I agree with the others that remodeling and expanding are in a separate category from maintenance, and that percentage of home value is not a relevant benchmark. A brand new luxury home will require less maintenance than a hundred-year-old hovel.
My approach may not be the most kosher, but it has worked for me. I have not budgeted for these things at all.
For something like a hot water heater replacement, I just pay for it out of regular cash flow. In practice it means our checking account balance is coming closer to zero than normal, or we economize on discretionary purchases for a couple months, but the point is these things are small enough to get absorbed in the course of day to day living. Most maintenance activities fall into this category for me.
A big irregular expense, such as replacing a roof or resurfacing the driveway, for me would be treated as a reason for dipping into the emergency fund. Your approach amounts to setting aside a separate emergency fund for the house, which seems inefficient. It is probably better to have a single omnibus emergency fund that you tap into for whatever emergency arises.
If you want a separate fund for the kinds of things I pay for out of regular cash flow, I would simply put aside something like $3,000 into a dedicated fund and use it when you need to service the AC or get a new washer or whatever. Keep the balance where you want it rather than keep plowing in the same amount of money every month.
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