Maintenance cost 1% of value. Still unclear... (flooring, furnace, AC, appliance)

[MerriMAC]

The general guideline is that basic house maintenance costs per year equal about 1% of the house's value. This is a rough estimate of maintenance over long term, 30-40 years of ownership. But this is the part that confuses me:

Take a 1600 square ft. SFH 3 bedroom/2 bath home in a small town on a basic lot. Cost is $150K. 1% of $150,000 is $1,500 per year.

Move that exact same house to a major US city in a nice area on a basic lot: the property would then be valued $400,000. Yet maintenance costs can't be both $1,500 and $4,000 for the exact same house.

So then is the average maintenance cost on a 1600sq ft SFH home closer to $1,500 or $4,000 per year?

[reed303]

One factor that could make the numbers valid would be the difference in cost of labor and materials between the two towns. On average, if housing is more expensive for same house, so is everything else. My daughter in CT pays much more for services, etc than I did in Colorado.

[Blondy]

Originally Posted by reed303

One factor that could make the numbers valid would be the difference in cost of labor and materials between the two towns. On average, if housing is more expensive for same house, so is everything else. My daughter in CT pays much more for services, etc than I did in Colorado.

True. Plus as you live in the house the cost of living will be going up as well. So if you bought a house for 150,000 that 20 years later is 300,000. The original 1% of 1,500 is not going to be going as far.

I have usually budgeted $2,000 -3,000 dollars for houses in the NE that ranged from 1700 -2500 sf.

But, it also depends on age of home, condition when you move in, whether you're calling remodel expenses maintenance, age/life cycle of appliances, roof, furnace, ac and other major components. What type of maintenance the flooring/carpeting or exterior requires. Are you including lawn/tree or figuring that separately. How long you plan to be in the house. Your ability/willingness to DIY rather than pay others.

Also, where you live can impact wear and tear. A/C in hot climate has to be replaced a lot more often because it works harder. A house on the coast will get worn down faster.

I find it easier to lay out what I know has to be spent routinely each year, estimate for the major things I know I will have to do at some point divided by number of years I expect to be there and add on 500-1000 depending on all the other factors.

All it takes in my area to hit $500 is a couple of minor repairs to plumbing, appliances or AC/furnace.