Buying a new house is more challenging now than it was just a few years ago. Some experts suggest a set of new budgeting rules for first-time home buyers, including a realistic amount set aside for regular repairs.
Some tried-and-true advice got left behind in the housing bubble that burst several years ago. One of those recommendations is to have a 20 percent down payment to start with. You should also assess the real estate taxes in your area, and how much a first-time home buyer mortgage might cost.
However, let’s assume that you’ve got all of that figured out and you are already a proud home-owner. Rather than allowing your home to gradually deteriorate over time, thinking that all you need to do is apply a few screws and nails from time to hold things together, you might be well advised to budget for repairs and improvements on an annualized basis.
Certainly, if you own a newer home you can do some work for yourself, and derive some savings that way while also taking care of your property. Some financial experts suggest budgeting 3% of the original home purchase price annually for ongoing maintenance and as much as 4.5 percent for older homes. This expense may be 10%-20% higher in areas that experience severe weather area like we do in the upper-midwest. This can run into the thousands of dollars each year, but in the end will protect and enhance your investment in your home.
Fortunately, the tax benefits of home ownership can offset maintenance costs to some extent. Check with your accountant at tax time to determine what kind of records you’ll need to keep when maintaining and/or renovating your home for tax purposes. This become especially important when you chose to sell your home after several years when you might incur a sizable capital gain. Your records and receipts will be invaluable at such times.
Should you desire to make substantial improvements to your home, such as an addition, construction of a garage, or major remodeling, NL&B Construction is your go-to source for quality, timely, and guaranteed work!