For many people, owning a home is the quintessential American dream. However, without due diligence and a financial plan, it’s easy to lose sight of the true costs of homeownership. While some costs can be accounted for up-front, such as a monthly mortgage and home insurance, the unknown costs that are the hardest to budget for are the various updates and repairs that will eventually come with time.
A house is not too different than a living organism in that it’s made up of many elements that work together harmoniously. Whether it’s electrical, structural, or mechanical, each component requires specific care and maintenance to keep it running at optimal performance and to prevent premature breakdowns. Over the years, these items will eventually need to be addressed as newer, more efficient systems come to market or a breakdown leads to a major repair.
Scoping Out Repairs
When assessing any work on your home, you’ll need to make a determination on the scope of the repair. If your home requires major repairs, you should budget accordingly, as larger scale projects generally require more materials and labor. Some cities require permits and inspections that are meant to meet city code and safety standards. Other factors you’ll want to consider are the age of your home, the builder grade of the materials, and even the environment where you live. These factors can impact the life expectancy for some of your home’s larger items, like the roofing.
Replacing a Roof
Despite your best efforts to maintain your roof, even the strongest, best-kept roofs could need replacing. Ice can wreak havoc, and if you’ve had your current roof for more than ten years, imagine its condition after weathering the unforgiving New England winter climate. Once you’ve determined that your roof needs to be replaced, you’ll need to budget for materials, labor, and disposal. While the costs of the raw materials will vary depending on the quality, it’s estimated that labor will most likely account for 40 to 50 percent of the overall cost.
Hiring a Contractor
Who you hire for any major repair work is a big decision to make. You’ll naturally want to find someone who offers the highest caliber of craftsmanship at the best rate. It can be difficult to find someone who does both, but referrals from friends, neighbors, and a local realtor can help you narrow down the best options. Be sure to do your homework before talking with any contractors, and know what questions to ask them as you shop around for quotes. The estimates will help you set expectations for how to budget for repairs. If the replacement is not an emergency, you might want to schedule the work for late winter or early spring when roofers might offer off-season discounts.
Saving Up for a Rainy Day
Sometimes the unexpected happens, and a tree may come crashing down and damage part of your roof. In the event of an emergency, you’ll have to address the problem immediately. While financial emergencies do happen, you don’t have to be caught off-guard. A rainy-day fund for repairing the damage from an actual rainy day can help ensure that you have some capital available to pay for the unexpected. This doesn’t mean you have to siphon off large amounts of your paycheck, but ways you can save include asking your parents for help, taking out a personal loan, or even taking out a home equity line of credit to borrow money for the repairs. You might also find that incremental savings ultimately add up and make all the difference as you weather the financial storm for when those rainy days hit.
Although homeownership has many costs associated with it, a little preventative maintenance can help prevent those costs from swelling to unaffordable amounts. Yet, even the most well-maintained homes are eventually faced with expensive repairs. When that happens, it’s best to be prepared.
Photo Credit: Pixabay
Guest post by Julian Lane