Nothing maintains your home's value better than maintaining your home. And there is plenty of maintaining to do; it seems like homes always need repair or attention. Expect to pay up to 3% of your house's value a year on regular upkeep, repairs and special projects everything from the weekly yard service to annual furnace checkups.
Have a plan. The best way to stay on top of your home's upkeep is to have a continuous and systematic whole-house maintenance program.
- Pick your team. To do the work, you'll need a stable of reliable people. Start with a handyman or general contractor who can handle a broad range of jobs. Ask that person and your friends for the names of an electrician, plumber, carpenter and painter. With each, start with small projects to be sure you're satisfied with their work.
- Fund it. You'll want to have $2,000 to $4,000 in cash available to cover emergency repairs and large occasional expenses. You could set up a separate online savings or credit union account, and put in some money from every paycheck so that you don't end up paying steep credit card interest for a major bill. If you have a big expense, replenish the account. You'll have yet another big-ticket repair soon enough.
- Bundle jobs. Since having a repairman out will cost $50 or $100 right off the bat, wait to call until you have at least two or three jobs that can be done all at once.
Do it yourself. Hire professionals for dangerous or especially difficult jobs, but when you can, do it yourself and save the big labor costs.
- Build a base. If you can't figure out the instructions and you don't know the basics, get a good home repair manual or take a home-maintenance class at a community college.
- Have the right tools. A good collection of basic house and garden tools on hand including duct tape, tape measure, screwdrivers, wrenches, a hammer, saws, sandpaper, and so on will make the your home-repair jobs much easier. You can rent or borrow other tools from hardware stores for once-a-year or one-time jobs.
- Be a good neighbor. Two or three sets of hands can make the most difficult jobs much easier. Offer to help neighbors with their routine repair projects and they will pay you back with their aid when you need it.
Renovate with care. It's hard to overdo maintenance, but it's easy to get big eyes and want more rooms, a bigger kitchen or a fancy bath. Go with the most you need and the least you want.
- Remodel for the right reasons. Renovate to accommodate a growing family, make an old house more modern, adapt the house to your changing living requirements or put it up for sale. Just don't let your desires get so far ahead of your checkbook that there's no sound financial justification for your project.
- Combine the work. If you're going to renovate, do the maintenance and repairs along with it, such as adding fresh paint when you add a room. Home improvements, but not routine maintenance, can be included in the cost basis of your home, which matters when you sell and need to figure out whether you must pay capital gains taxes on profits above $500,000 for couples and $250,000 for singles.
- Consider energy. Keep fuel and electricity costs in mind when you look to buy new appliances. Energy efficient heaters, air conditioners, refrigerators, windows, refrigerators, washers, dryers and dishwashers can mean big savings on your utility bills.
What not to do. Show some restraint and don't get carried away when you start thinking about all the things you could do to your home.
- Don't assume renovating will make your house valuable. You can expect to recoup perhaps two-thirds to three-fourths of the cost of home improvements when you sell a house. In other words, most remodeling efforts lose money. So don't do it if you want to make a profit.
- Avoid long term borrowing. Home improvements should be paid for out of pocket or with short-term loans of five years or less. That way, you won't spend too much and you'll keep your losses within reason. One exception: if you are undertaking a whole-house remodel in lieu of buying a new place, as long as your remodeled house won't be too expensive for the neighborhood.
Adapted from The Wall Street Journal. Complete Homeowner's Guidebook, by David Crook, (Three Rivers Press, 2008).