Any home requires work done in order to keep and maintain it. Maintenance costs can be a little hard to budget for because you never know when something like an electrical problem or a plumbing problem can arise. However, there are other maintenance costs such as gardening, painting etc. which can be expected and budgeted for. Because they are both expected and unexpected costs involved in the maintenance of a home, it is usually advised to presume to have to spend 1% of the cost of the home every year for maintenance. For example if the value of the home is $200,000, you can provide for maintenance by budgeting $2000 per year for maintenance.
The maintenance cost for the home may be less in any given year and high in the next because of unexpected expenses such as replacing a leaking roof. As long as you have been saving and budgeting for annual maintenance, you will not have a problem because you would have saved up over the past few years.
There are certain kind of properties such as condominiums that require you to pay monthly fees to the housing Association to take care of the maintenance of the entire complex. You are required only to maintain the interior of the unit. The similar rules may apply when you take up a flat. Usually you can expect to pay a certain percentage of your rent or the value of your flat towards the society maintenance fee. Always inquire about the maintenance cost of the condominium unit or a flat as they can differ widely.
You should be aware of the difference between maintenance cost and home improvement. Many times these 2 can blend into one in the homeowner’s view. Buying new furniture, remodeling the kitchen, landscaping and other expenses on the home qualify as home improvement rather than home maintenance. There is no limit to the amount you can spend on home improvements and many new homeowners quickly fall into this trap. Excited by their new home purchase, they quickly spend a lot on bringing in improvements in the house and find themselves quickly financially strained.
You should also note at this point that the amount spent on home improvement may be deductible from the capital gain when you sell the house whereas the amount home maintenance costs is not according to the IRS rules.
The amount that you can expect to spend on home maintenance will defend from one person to another as well as the kind of property that you purchase. But as a general rule of thumb, providing for 1% of the purchase price of the property as maintenance cost in a given year should keep you covered.