Preparing for Home Repairs
Home repairs require a delicate balancing act when it comes to financing. You have a list of immediate needs, like fixing leaky windows or repairing a broken fence. Then you have dream upgrades, like installing a pool heater or furnishing your basement. The challenge often isn’t deciding what to do, but when to do it. You’ll want to make sure that you choose the best time to make upgrades or repairs while keeping your finances stable. If you plan and tweak your home budget, you likely won’t have to sweat repairs or upgrades. Here are a few tips on how to prepare for a major home repair.
How to Budget for a Home Repair
Most financial advisers recommend that you set aside one to four percent of your income each year for home repairs and maintenance. If you have an older home or rely on contract work to complete the repairs, this number will most likely be higher. For example, a homeowner who recently bought a new $300,000 home should set aside at least $3,000 each year for repairs.
Homeowners often face two kinds of repairs: one-off emergencies and regular maintenance. It is important to address emergency needs immediately to maintain the health and safety of your home. Meanwhile, regular upgrades will likely improve your standard of living and lifestyle.
How to Pay for Home Repair Emergencies
Emergencies tend to be the most impactful because they’re untimely. The first step to wrangling home repair costs is to plan. You can avoid major expenditures by assigning yourself one project per month. For instance, you could set aside funds in March to replace a pool heater and replacing your heating unit in August. Proper planning can help prevent emergencies while continuing to improve the state of your home. Something that’s not an emergency today could become an emergency tomorrow. It’s much easier to tackle it now while it’s not a big issue.
Some people prefer to keep their home repair nest egg in a specific savings account in case they need to access it. You can cover small tasks as they come up and save up for a major upgrade by setting aside a few hundred dollars monthly for home repairs.
Stay a Step Ahead of Home Repair Emergencies
One way you can start saving for home repair costs is by identifying potential issues that might come up. For example, an AC unit lasts about 10 to 15 years, while dishwashers typically last less than a decade. Even small repairs like caulking is needed every five years or so.
Many of these items can last much longer than their estimates. Modern air conditioners can last more than 20 years with the right maintenance.
As your home ages, consider hiring experts to inspect certain parts of your home. For example, you might find that your roof is in great condition, but your water heater is on its last leg. That means you can budget for a new water heater, but not worry as much about the roof.
Small upgrades and preventative changes can save you financial headaches in the future.
While you might have a beautiful oak tree in your backyard, you might not love that it leans over your house. Removing the tree now can prove much cheaper than hoping a branch doesn’t fall through a window during a nasty storm.
The sooner you can get ahead of repairs and problems, the less likely you are to experience emergencies that cost even more.
Home Repair Costs
If you have home repair needs that aren’t immediate, try to get an idea ahead of time for how much it will cost, then you have more time to save, research contractors, and find the best price.
HomeAdvisor has a TrueCost project tool that estimates the average cost of a repair based on your zip code. It also provides ranges for what the low-end cost would be versus a more high-end job. This should give you a ballpark figure for the basic costs before you reach out to contractors for estimates.
*Keep in mind that while HomeAdvisor’s tool is useful, they are estimates, which are subject to change.
Seasonal factors should also be considered. Prices and timelines for your repairs could increase during peak season. Plan your repair carefully and try to choose the best time for it.
The phrase “measure twice, cut once” also applies to home repairs. It’s important to carefully vet the people you hire to make sure the repair is done right. That way, you don’t have to hire someone else to fix the work of someone before them.
Think Long-Term When it Comes to Home Repairs
With home maintenance, you tend to get what you pay for. Think of it this way: you can invest in high-quality upgrades or repairs now, or you can continue paying for upgrades and repairs every few years.
Repairs made with good materials by experts last longer, look better and save money. Focus on quality instead of cutting corners with or purchasing cheap alternatives. This can likely help you two, five and even 10 years from now. Bottom line: invest in the best.
Additionally, high-quality home repairs can also improve the resale value of your home. RISMedia has a list of repairs and upgrades that have the highest return on investment on a home’s resale value. For example, improving your attic insulation has an ROI of 107%, which means that it will more than pay for itself when you sell your home.
You could be making repairs to last decades from now or because you want to sell your home soon. Either way, taking the long view on home repairs will be the smartest financial choice.
Spend a little more money now to save much later
Repairs are normal! The truth of the matter is that as long as you own your home, it will need repairs at some point. It comes with the territory. But there’s good news for you.
You can turn your house into a dream home within a budget by fixing one leaky sink and broken appliance at a time. With the right financial planning and knowing which upgrades your home needs, you can create a calendar to manage repairs.
You can sleep comfortably knowing that when your home needs a little fix, you can handle it.
This article is for educational purposes only and is not intended to provide financial, tax or legal advice. You should consult a professional for specific advice. Best Egg is not responsible for the information contained in third-party sites cited or hyperlinked in this article. Best Egg is not responsible for, and does not provide or endorse third party products, services or other third-party content.