Revered Japanese poet Matsuo Basho once wrote "every day is a journey, and the journey itself is home." In other words, we have to make ourselves comfortable with change. Nowhere is that more true than in your own home. Whether it’s your first property, latest investment or dream home, there’s always work to be done. And if you’re to keep your property in pristine shape, it needs to be budgeted for.
It’s easy to find studies that tell you how much an ‘average person’ pays on house maintenance costs. These figures often stem from a ‘rule of thumb’ about how much each home should set aside: generally 1% of your property value, although some advisors say it’s more like 3-5%.
While this serves as a handy starting point, it doesn’t reflect the reality of your unique property in today’s rapidly-evolving property market. As well as socio-economic trends that have doubled household spendings over the past 60 years, there are a range of detailed areas that you must factor in for an accurate budget, which we will discuss below.
It’s always good to start by canvassing local property managers. If you’re considering renting out a property, they will be more than happy to show you their expertise in the hope you’ll hire them. You can also speak to any other investors to seek guidance.
Ask them about standard costs in the area, such as council tax, utilities and any local issues that may have arisen such as knotweed or subsidence. You’ll be in a much better position to realistically assess what house maintenance costs you’ll be facing in the near future.
The next stage is pinning down those expenses which won’t significantly change from month to month. These include:
Property management or home association fees
If you can’t find the figures for each of these bills online, go direct to local authorities and service providers who will be able to provide more concrete numbers for you.
If your property is an old building, consult your real estate agent about what renovation work (such as a roof isolation) should be carried out in the near future. Real estate agents have often solicited offers from trusted partners. Alternatively, you can of course also inform yourself and compare the various offers.
Armed with these quotes, you can order them by priority and work out a plan to set aside a fixed amount each month in order to cover them - even for problems that might only fully appear in the medium or long-term. That way those surprises that disrupt your cash flow become just another of your house maintenance costs.
By managing these potential issues in this manner, you can focus on how to manage your property investment in the most profitable manner. Or simply enjoy your beautiful home without worrying what’s around the corner