1 in 3 homeowners doesn’t have sufficient savings
Nerdwallet found that nearly one in three homeowners say they don’t have any money set aside for home repairs and improvements. Many other people have some but not enough: Of those that have a savings account, the median balance is $5,200. Many repairs will cost far more than that.
So if you decide to move forward with a freehold home what should you be saving for home repairs and maintenance?
How much to save
If the home is less than five years old, then 1% is a good number because the home’s equipment, appliance, and building materials are still relatively new. If a home is 20 years or older, then 4% is more realistic because more of the home’s equipment, appliances and building materials have reached the end of their useful life, and you likely will need to replace them. So on a $400,000 freehold home, it is recommended to save $4,000 to $16,000 depending on the age of the property. For some people being disciplined enough to put aside this amount of money to protect their home and often biggest investment isn’t an issue.