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all increase a home ’ s worth . But good maintenance does affect an appraiser ’ s estimate of a property ’ s economic age — the number of years that a house is expected to survive .
Economic age is a key factor in helping appraisers determine depreciation — the rate at which a house is losing value . A well-maintained house with a long , healthy economic age depreciates at a much slower rate than a poorly maintained house , helping to preserve value .
Estimating the value of maintenance
Although professional appraisers don ’ t assign a positive value to home maintenance , there are indications that maintenance is not just about preventing little problems from becoming larger . A study by researchers at the University of Connecticut and Syracuse University suggests that maintenance actually increases the value of a house by about 1 % each year , meaning that getting off the couch and heading outside with a caulking gun is more than simply a chore — it actually makes money .
“ It ’ s like going to the gym ,” says Dr . John P . Harding , Professor of Finance & Real Estate at UConn ’ s School of Business and an author of the study . “ You have to put in the effort to see the results . In that respect , people and houses are somewhat similar — the older ( they are ), the more work is needed .”
Harding notes that the 1 % gain in valuation usually is offset by the ongoing cost of maintenance . “ Simply put ,” he says , “ maintenance costs money , so it ’ s probably best to say that the net effect of regular maintenance is to slow the rate of depreciation .”
How much does maintenance cost ?
How much money is required for annual maintenance varies . Some years , routine tasks , such as cleaning gutters and changing furnace filters , are all that ’ s needed , and your total expenditures may be a few hundred dollars . Other years may include major replacements , such as a new roof , at a cost of $ 10,000 or more .
Over time , annual maintenance costs average more than $ 3,300 , according to data from the U . S . Census . Various lending institutions , such as Directors Credit Union and LendingTree . com , agree , placing maintenance costs at 1 % to 3 % of initial house price . That means owners of a $ 200,000 house should plan to budget $ 2,000 to $ 6,000 per year for ongoing upkeep and replacements .
Proactive maintenance strategies
Knowing these average costs can help homeowners be prepared , says Melanie McLane , a professional appraiser and real estate agent in Williamsport , Pa . “ It ’ s called reserve for replacements ,” says McLane . “ Commercial real estate investors use it to make sure they have enough cash on hand for replacing systems and materials .”
McLane suggests a similar strategy for homeowners , setting aside a cash reserve that ’ s used strictly for home repair and maintenance . That way , routine upkeep is a snap and any significant replacements won ’ t blindside the family budget . McLane ’ s other strategies include :
Play offense , not defense . Proactive maintenance is key to preventing small problems from becoming big issues . Take the initiative with regular inspections . Create and faithfully follow a maintenance schedule . If you ’ re unsure of what needs to be done , a $ 200 to $ 300 visit from a professional inspector can be invaluable in pointing out quick fixes and potential problems .
Plan a room-per-year redo . “ Pick a different room every year and go through it , fixing and improving as you go ,” says McLane . “ That helps keep maintenance fun and interesting .”
Keep track . “ Having a notebook of all your maintenance and upgrades , along with receipts , is a powerful tool when it comes to sell your home ,” advises McLane . “ It gets rid of any doubts for the buyer , and it says you are a meticulous , caring homeowner .” A maintenance record also proves repairs and replacements for systems , such as wiring and plumbing , which might not be readily apparent .