Owning your home is one of your greatest achievements. It feels great and fulfilling—until you've got a leaky faucet. Or the paint all over your walls is peeling. Or the gutters are clogged. 

Doing home maintenance and repairs can be daunting. But there isn't a house with walls you never have to repaint or roof that you never have to replace. And when your home is your biggest financial asset, maintaining it is a must. This is why you need to set aside money to take care of regular home maintenance and repairs. And no, it shouldn’t be your emergency fund, but a specific budget allocated for routine repairs and even unforeseen ones so you can keep your home in tiptop shape.

Figuring out how much money you will need to save for home maintenance is also crucial if you’re a first-time buyer. Maintenance and repair costs are one of the hidden expenses of buying a home—one thing you need to consider when figuring out how much mortgage you can afford.

Home maintenance is non-negotiable. You have to perform maintenance on your property in order to prevent deterioration and slow down its general wear and tear. On the other hand, a renovation or upgrade is being done to improve or change an aspect of your home. 

Your home maintenance budget should be used primarily on routine upkeep, small repairs and fixes, and prevention of bigger problems. Examples of maintenance work include:

• mowing the lawn, treating grass, and pruning trees,

• fixing leaky faucets,

• cleaning out gutters and vents,

• replacing HVAC filters,

• cleaning the windows and siding,

• power-washing your deck or patio,

• cleaning your dryer ducts,

• repainting walls,

• inspecting your fire extinguishers,

• oiling door hinges, etc.

While larger projects such as remodelling a kitchen or a bathroom fall under home renovation, there are times when there might be some overlap. For example, if there's a need to replace a leaky faucet, you’d be better off upgrading it to a nicer fixture when getting the job done.

So how much should you set aside for home maintenance? While we will discuss the factors that can impact your budget later on, there are two most popular rules that you could follow when planning for maintenance costs.

First is the 1% rule, which says that you should set aside 1% of the purchase price of your home for ongoing maintenance. So if your home costs $300,000, you should budget $3,000 per year. However, this rule has its limitations since market conditions impact home prices. Not to mention that it doesn't take into consideration the general condition of the property when you purchased it. This rule just gives you a safe estimate of how much you should have as maintenance savings. 

Another popular rule is the square footage rule, where experts recommend to budget $1 per square foot, per year. It’s a practical estimate and slightly more consistent than the 1% rule since it’s directly related to the size of your home, and your square footage doesn’t change. This means if you live in a 3,000-square-foot home, your annual home maintenance budget would be $3,000. However, this rule also doesn’t take into account the many factors that could further affect your maintenance and repair budget.

So what are the factors to consider when setting up a home maintenance budget? Here's the list:

1. Age and condition of the home

The range of your actual maintenance costs may depend largely on the age and condition of your home. 

Older homes, specifically those that were built 10 to 20 years ago, generally require more work to maintain compared to homes that were built within the past decade. They're also likely to need major structural, electrical, roofing, or plumbing upgrades to keep the home up to code. If your home is less than five years old, or if it has been recently renovated, you might be able to budget less for maintenance and repairs for the first few years since most of your home’s appliances, materials, fixtures, and finishes are still new and in good working condition. The 1% rule could be your appropriate range if you have a newer home, but it could go as high as 3-4% for older homes.

If you bought a new construction from a builder, you may even have an overall warranty or warranties on individual items in your property. While the warranties are still in effect, it could potentially reduce the amount you should save. However, don’t think that a new construction home is maintenance-free. Proactively taking care of your home, even if it’s new, can help you avoid future bigger problems.

2. Home size or square footage

Another general rule is that the bigger your house and lot, the higher your maintenance costs. A bigger property, such as a single-family home in the suburbs, requires more upkeep than a small condo in the city or a tiny home, regardless of how much the house is worth. A larger home comes with more room and space to maintain, both in the interior and exterior parts of the home.

3. The weather or environment and location

Weather plays a big role in how your maintenance can be affected. Snow, ice, temperature, humidity, sun exposure, rain damage, wind damage, and other wear and tear issues brought on by the local weather will impact the upkeep and repairs your home will need. If you live in a region with harsh winters, you might need to save more on snow removal costs. Homes in coastal areas that are often affected by storms might have a greater need for paint and roofing upkeep. Likewise, homes in humid regions are more prone to mold and mildew.

It's also a different scenario if your home is located in a hurricane-prone area or in areas where there’s regular flooding. If your home is situated adjacent to a flood plain, your basement is at higher risk of water damage. These environmental and topographical variables should also be considered when setting up a home maintenance budget.

4. Building materials

The cost needed to maintain your home may also depend on the building materials used. Some materials will require more or less upkeep than others, and there are some that are more prone to damage.

5. Your family size

The more people are living in a household, the greater the chance of wear and tear, especially if there are small children. In this case, there might be a more frequent need for minimal touch-ups and repairs, which should also be considered when creating a budget.

Bottom line

Proper maintenance and upkeep will help preserve your home's value and put you ahead of the game once you decide to sell. The key is to be proactive right from day one, rather than just relying on your emergency fund when things have already gone wrong in your home. By setting aside small, manageable amounts of money on a regular basis, you’ll be less likely to sink a large chunk of cash to cover for any unforeseen repairs, especially if you will need to pay a handyman to do the job.