Homeowners Are Told to Budget Maintenance at 1% to 4% of Their Home's Value. Here's How to Know Which Side of the Spectrum to Go With

When my husband and I bought a newly built home about 14 years ago, we knew we'd be looking at a larger mortgage loan than for a home that was previously lived in. But we liked the idea of having a brand-new place. And we figured that what we spent on mortgage payments, we'd save by not having to spend so much on repairs, at least early on.

But even though our house was built from the ground up before our eyes, we still had to cover the cost of maintenance from the moment we moved in. And that was a tricky thing to budget for.

If you're buying a home, you may be wondering how much to expect to spend on maintenance. There's a general guideline, but it's pretty broad, so you may need to do your part to narrow that number down.

The general convention

You'll generally hear that your annual property maintenance will cost between 1% and 4% of your home's value. So if your home is worth $300,000, you'd be looking at anywhere from $3,000 to $12,000 for annual upkeep.

That's a huge range. And a hard one to work with. But there are steps you can take to get to a more accurate number.

How to land on the right maintenance estimate

To figure out how much to budget for maintenance, you're going to want to consider three factors:

• The age of your home
• The condition of your home
• The amount of time you're willing and able to put in

First, let's talk about age. Older homes generally tend to need more work than newer ones. You might have to regrout tiles or seal cracks more often due to many years of your house settling. And you might have to steam carpets more frequently if they've been in use for a long time and haven't been replaced.

Of course, some home maintenance tasks don't hinge on age. If you have a yard, your grass needs to be mowed as it grows. It doesn't matter if your home is 12 years old or 100 years old -- grass is grass, and its growth will probably hinge on the weather more so than anything else. But otherwise, assume that if your home is older, your maintenance costs will be higher than with a newer home.

Next, consider the condition of your home when you moved in. If it was well maintained, you may not have to spend as much. But if there are a lot of things in disarray from neglected maintenance, you might end up spending more.

Don't forget to consider your schedule

Finally, consider how much time you have in your schedule. If your workload tends to be light and you know you have time to mow your own lawn, remove your own snow, and paint your own deck every year, you might reap some savings compared to having to outsource those tasks.

But it's important to be honest with yourself about your willingness and ability to perform maintenance yourself. If you know your time is limited, then expect to spend more.

All told, there's no single formula for determining what home maintenance will cost you. But if you have an older home that's not in the best shape and you have zero time for upkeep, estimate 4% for maintenance. If you have an older home but it's in good shape and you're willing to do the work, 2% may be a more accurate estimate.

Either way, do your best to be flexible. And make sure to have extra funds in your savings account in case your maintenance costs come in higher than expected.