Whether you’re buying a house to live in, or to rent out, this is an expense that’s often overlooked until you’ve made the purchase, the boiler breaks and it costs you a small fortune to replace. Having been in this business for over thirty years, however, we have a pretty good idea of how much you should budget for home maintenance.
And before we continue, if you’re living in the home you’re going to look after it better
than a rental, so keep that in mind when you figure it all out, allowing a little bit more for maintenance, we’d suggest, if it’s an investment property.
So, how much should you budget for home maintenance?
There are a few different strategies around this, but the one we find works the best is the 1% rule.
1% of the property value
The average annual cost of a home’s maintenance can be up to about 1% of the value of the property, so if you budget for that, you’ll tuck away some funds for things like heating and air conditioning when they finally need replacing. Preventative maintenance can reduce the long term costs of all this too, and whether you’re a home owner or investor, we can actually help with that, if you want.
A number of other factors can also affect the cost, and these include:
1. The age, and size of the property
In general if your home is less than ten years old, you’d be pretty unlucky to be shelling out 1% of the value of the property on home maintenance, but as your home gets older (just like us) it’s going to need more maintenance! And obviously, the larger the property, the more maintenance is going to be required too.
2. The condition when you buy it
If it’s already in disrepair, then obviously your costs are going to be higher to begin with, but you should also try and determine the age of any boilers, air conditioning units, plumbing or electrical systems too. If it’s an old house but all of these have been replaced fairly recently, that’s great news for your home maintenance budget.
3. The weather and location
Unfortunately, the world is constantly trying to decompose your property, and depending on where you live it’s going to happen at a different rate. If you live right by the ocean in Sydney, for example, salt water is constantly eating away at your home, your car and all the rest of it, so maintenance costs are going to increase.
A unit in the middle of the city is a different story, and in the Blue Mountains you’ve got the cold to content with. Another factor to consider is the cost of getting maintenance work done where you live. Ask around and you’ll find that costs can vary quite significantly.
So how does that play out in Sydney?
Sydney Home Maintenance Budgets
Type | Median Purchase Price* | Annual Maintenance Costs (Up to 1%) |
Unit | $776,780 | Up to $7,767.80 |
House | $1,230,581 | Up to $12,305.81 |
*31st March 2023
If you want some advice on any of this, just give us a call on +612 9586 0000 , or click here and ask, we’ll give you an honest, well informed estimate of the property’s maintenance costs before you buy it, so you know what you’re getting into.
We also have a property maintenance service for owner occupiers, and for investors
that will help you stay on top of all this, and should lower your costs in the long run too.
