Here’s what you should expect to spend on home maintenance

I trust former and current homeowners will back me when I tell them that they have no idea what it costs to own a home until they actually buy one. Maintenance costs hit you from all sides of your home, and then there are upgrades and renovations to cover.

A new book can help new homeowners prepare for these costs and get the most value out of their home when they sell it. Is named poor house no more: 9 Steps to Increase Your Home Value and Net Worth, by veteran financial writer Romana King. Here is a question and answer session I did with Ms. King via email recently.

Q: Increasing the value of your home is a big theme of the book. Given the way prices are skyrocketing across the country, how important is it that people reeling under the weight of their mortgages spend money on improving a home?

TO: My gut response to this question is that people need to reexamine their budget if they’re struggling under the weight of their mortgage, but we can save that discussion for another time. In general, my answer boils down to three critical points:

1. If you’re having trouble paying your housing costs, go back to your budget and recalibrate. This does not mean that you are bad or that you have done something wrong. It just means you need to adjust your spending/savings balance.

2. Home maintenance is a priority; home renovations are not. The focus should be on establishing a systematic way to maintain your home; the immediate benefit is a properly functioning property with a relatively small chance of unexpected repairs. The long-term benefit is that a well-maintained home allows you to plan for improvements and renovations—major expenses that should fit the needs of your family and your personal financial plan, not what the neighbor is doing.

3. If you choose to renovate, focus on smart home improvements and/or stick to well-researched budget guidelines. Unfortunately, most people spend more time shopping for the perfect quartz countertop than researching the cost, schedule, and potential value of a particular home renovation.

Q: Many people have been renovating since the pandemic started. What are the reindeer that add the most value to your home?

TO: Based on historical averages, these are the best reindeers in 2022 for people about to put their home up for sale:

  • Increase curb appeal by adding manufactured stone cladding – 95.6% return on investment
  • Replace garage door: 94.5% ROI
  • Replace siding with fiber cement (also known as HardiBoard): 77.6 percent; with vinyl, 74.7 percent
  • Minor kitchen remodel (mid-range materials): 77.6%

For people planning to stay in their homes, rewarding renovations include adding an attic room, remodeling the basement, adding a family room, and updating windows.

Q: How important to resale value are weather-related home improvements? I’m thinking efficient heating/cooling, insulation, etc.

TO: Important! Not only to help the environment, but also to help our budgets. These days, we must be clear about the best possible use for each dollar earned; If that dollar is being thrown away because of a leaky toilet, or going down the chimney because of an inefficient furnace, then as a homeowner, I need to reconsider where I’m putting my home improvement money. But here’s the rub: Potential buyers don’t appreciate these energy-efficient upgrades. Gone are the days when a buyer was impressed with new double pane or even triple pane windows. These days, prospective buyers simply assume this upgrade is complete and will place less value on their home otherwise.

Q: You talk a lot about the cost of home maintenance, which is completely overlooked in all the hype about home ownership. I remember a rule of thumb that said home maintenance costs an average of 1 percent of home value each year, but that seems to penalize people in expensive cities. What do you think about a standardized estimate of home maintenance costs?

TO: This question is one of the reasons I wrote this book. It’s much easier for people who hate math and money to set aside 1 percent of their home’s value as annual home maintenance costs. A little more work is needed to calculate these costs using a per square foot calculation; however, I believe the square foot method outlined in my book can help homeowners make decisions that maximize every dollar earned. Based on my research, homeowners can expect to pay between $0.71 and $3.94 per square foot on home maintenance each year. The lower end reflects smaller or newer/more recently updated homes or homeowners willing to do most of the work themselves. The higher end reflects larger or older homes or homeowners who would prefer to pay professionals to do the various jobs.

Based on this range, homeowners living in a 2,000-square-foot home should budget between $1,420 and $7,880 each year in home maintenance costs.


ICYMI (In case you missed it)…

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