Home maintenance and repair expenses continue long after you close on your home. Many first-time homebuyers are not ready for these ongoing expenses. Unlike when renting, when you own a home and something goes wrong, it is your responsibility to fix it. Also, if you go to sell your home one day, you want it to be in the best condition possible to get the most profit. With a little preparation, you can be ready to stay on top of these projects that may come up so that your home has the highest possible resale value.
Having funds available for home maintenance costs is a matter of discipline, planning, and prioritizing. The following suggestions can help you stay on task and be prepared.
How to Add Value to your Home on a Budget
It is almost inevitable that some bigger repairs are going to come up from time to time. You’ll also probably want to do some remodeling once you’ve been in the home a while. Those pricier repairs like a new furnace or roof replacement can really set you back if you’re not prepared to cover those costs. If you put your house up for sale, however, it probably won’t do very well if big things like these need to be done.
As with all saving, the key is to start early and save gradually. You should aim to set aside at least 1 to 3% of your home’s value every year. You may not use all of that money each year for home repairs, which is a good thing—you can continue adding to the fund and be ready if something really big comes up.
How to Increase The Value of your Home
Most new homeowners will have a list of things they would like to do around the house. Maintenance issues will come up and add to that list. You don’t want to let these things go because if you decide to sell, it could be a big investment all at once. To avoid going over your budget and to make sure the most important things get done, you should plan to tackle each project in order of importance.
Obviously, fix things that pose any hazard before fixing purely aesthetic details. Issues like the trim needing a fresh coat of paint will fare far better in resale than if all the siding needs replaced. If your home has an issue with the HVAC system, plumbing problems, or mold, make those a top priority before moving on to the more “optional” projects.
Assuming you have taken care of any major concerns when you are prioritizing it is also a good idea to put yourself in the shoes of a potential home buyer and think about what they’ll be looking for. Many homebuyers will notice things like the landscape our general curb appeal first. If you are adept at yard work, keep your bushes and hedges trimmed regularly, and invest early on in some low maintenance, native plants that work well in your area. Make sure paint on the home is in good condition. If you have to do any paint retouching, be sure to match the color exactly. If you aren’t comfortable either with landscaping or paint, hire a professional—but get two to three recommendations first to see who will get you the best value. Contact Rebecca’s Realtor for any questions!
Sometimes, you may know in advance that more large projects are coming up and that the amount you’re saving each month will not be enough. Account for that early by setting aside more or making a few cuts elsewhere so that you don’t have to finance these projects.
Cut Costs Around the Home
When you buy a home, expenses can add up quickly, and it’s not always possible to keep putting more away for your home update budget. In order to be able to save more, think of ways you can cut down on other expenses.
To start, you can take a look at your overall budget. Make a list of all of the bills you pay, and all of the other things you spend money on each month—restaurants, gas, clothing, and other recreational activities. Check in to what you can lower without significantly affecting your lifestyle. Many phone and cable companies will offer discounts when you move to a new location—call their customer service line to see if they have any deals available. If you have been spending a lot of money eating out, see if you can skip one restaurant night and put that money aside instead.
Another way you can cut cost is by looking around your home to see where energy is being used. Any energy use you can cut down on can lower your utility bill. Even a few small changes can save a significant amount of money each month. You can replace some or all of your light bulbs with energy-efficient ones. Consider a low-flow toilet that can save water every time you flush. Check your appliances to make sure they are all running efficiently and not using a lot of unnecessary energy.
Whatever money you save from any of these changes can, in turn, be put into your fund for home repairs. You may be surprised by how much money you can save for other things when you make just a few adjustments to your monthly budget.
Consider DIY-ing Some Projects
Homeowners that are comfortable with power tools have a significant edge over those who don’t know a wrench from a screw driver. If you have the know-how, you can end up saving tens of thousands of dollars over the years by doing smaller home improvement or repair projects yourself.
When you pay a contractor to do work for you, they charge you for the materials needed, plus the hours of labor spent and enough extra to make a profit. If it’s just you, all you have to pay for is the materials and your own time spent. Not only can it be a more economical way to get things done around your home, but it can be more satisfying, too. It’s a good feeling to stand back and look at a finished project and know that you yourself did the work.
Of course, only tackle projects you are comfortable with. There have been plenty of homeowners who have taken on more complicated projects than what they were capable of and ended up spending much more money overall when they had to call a contractor to come fix what they did. If you are thinking about doing a repair or remodel that you haven’t done before, make sure you are prepared for everything you need. If you have any friends or family who have done the same project before, consult with them about what you’re doing.
When you are DIY-ing project, avoid using shoddy materials or taking shortcuts. Shoddy work gets noticed by prospective home buyers. If they notice something poorly done when they walk through the house, they could question what else is not up to par in the home they’re viewing. Do things right the first time, both for your sake while you’re in the home, and to get the most value for it later.
Don’t Take On More Credit
When you buy a home, it is tempting to want to do everything at once. You also might not be as self-conscious about your finances because the scary part of getting a mortgage approved is over. As hard as it is, avoid opening new credit cards or taking out big loans to work on home remodeling projects. Instead, as noted above, make a list of what has to be done and start saving gradually, so you’ll be able to pay for those projects in cash.
It is possible that something major may come up that you’re not prepared to pay for financially. If big storm hits or you find out some major renovation needs to happen in order to ensure the safety of those who live there, you may have to resort to other options to be able to fund the repairs. It is not ideal to file any homeowners insurance claims right away since any claim can make your rates go up and stay on your record, but if any major accidents happen, consult with your insurance company. If a loss is going to cost tens of thousands of dollars, it will probably be worth it to file the claim and just have to pay your deductible. If whatever is going on is not covered by insurance, be smart about securing financing or other means of paying for it—don’t apply for and accept the first loan you see.
Your home is very likely the biggest investment you’ll make in your lifetime. It also will likely be your biggest asset. Protect your investment and keep up with upgrades and repairs without putting yourself at financial risk. By planning ahead and saving early, you can make sure you’ll be able to keep your home in top condition and maximum resale value. Do you need help with a home valuation prior to making your decision, I will be glad to compile all the information that you will need to make a sound decision. Fill the form out below and I will get back to you asap.
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