Budgeting for home maintenance; the other housing crisis

by Dan Krell © 2009

Current economic conditions are creating another housing crisis. Even though credit is tight and savings are dwindling, don’t forgo regular home maintenance. Forgoing regular maintenance can not only possibly devalue your home, but also create larger problems that can potentially make your home unlivable.

Many first time home owners are surprised by the actual cost of home ownership. Some get caught in the trap of spending their savings to purchase their home without having any reserves for emergencies, let alone regular home maintenance. If regular home maintenance items are not attended to, these items can become expensive emergencies. For example, a small roof leak left unrepaired can wreak havoc on the roof, ceilings, and walls requiring extensive repairs, as well as the potential for mold.

Adding to the impending crisis is the fact that many home owners are so bogged down with debt that they cannot save enough money for regular maintenance items. A few years ago this wasn’t so much a problem because credit was easily available; qualifying for a home equity line of credit to pay for home repairs and renovations was easy. However, presently qualifying for a line of credit is difficult, let alone trying to keep one open.

Putting off home maintenance due to a clean home inspection may not be such a good idea. Having a home inspection can determine the overall condition of the home and give you some peace of mind when you purchase a home; but the inspection is limited. In fact the law governing Maryland home inspector licensure describes the limitations and exclusions of a home inspection as not being technically exhaustive and may not identify concealed conditions or latent defects. Additionally, a home inspector is not required to determine (among other items): the condition of systems or components that are not accessible; the remaining life of any system or component; the strength, adequacy, effectiveness, or efficiency of any system or component; any future failures of systems and components; compliance of the structure with applicable provisions of local ordinances, regulations, or codes; and the existence of any manufacturer’s recalls (COMAR

Even new homes have maintenance requirements. Sometimes, poor craftsmanship or inadequate installation techniques necessitate repairs sooner rather than later.

Relying on your homeowner’s insurance to repair your home in case of a system or component failure may not be a good idea either as some insurance policies may limit damage/repair costs and/or not cover damages due to poorly maintained systems (insurance coverage varies; you should consult your insurance agent for clarifications to your policy).

If you haven’t yet budgeted for home maintenance- start today! Freddie Mac recommends having a “home audit” to assess the maintenance needs of your home. To meet regular and emergency maintenance needs, some experts recommend an annual savings of one to three percent of the home’s value. Planning ahead can make home maintenance easier as well allow you to make informed decisions to possibly lower your maintenance costs (FreddieMac.com).

A sign of a home owner facing financial challenges is often manifested by their home’s disrepair. Homes that fall into disrepair are an indication that the home owner is struggling. If you or a neighbor needs assistance to create a home maintenance budget, contact a local housing counseling agency.

This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of February 2, 2009. Copyright © 2009 Dan Krell.

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