When talking with Toronto condo owners their biggest complaint is the paying of monthly maintenance fees. But when you think about it, this monthly collection of cash goes to the continued updating and repair of what is their biggest investment. Most Toronto homeowners relish on not having to fork out a monthly fee, but as they say, “You can pay the piper now or later”.
Most homeowners know that as a house ages they will be called upon to replace appliances, a failing roof, aging heating/cooling systems, flooring and a myriad of other household repairs which goes along with ownership. But unlike condo residents, house owners have most likely not put aside any monthly allowance and can be faced with a major repair without the cash to cover it. Ouch, can you feel the pain?
However, there has been a formula kicking around for years of how to best estimate home maintenance costs: it is based upon allotting 2 to 4 percent of a home’s value per year. Think of it this way, say your house is worth $500,000 then you should expect to put aside $10,000 to $20,000 per year. Now, considering that there is a $10,000 buffer range, this one-size-fits-all approach may not work for you. Again, what you will spend really depends upon whether you have a new home or one that is older and need extensive work.
An alternate way to budget, and one that I feel is definitely more accurate, is to perform what I call is a housing asset update. No one knows our homes better than we do and here is where you get to assign a ‘best before date’. BE HONEST, SO YOU GET AN ACCURATE ASSESSMENT. Whether you start in the basement or the roof, it means looking at all the components which make up your home and assigning a date when you can realistic expect the end of its operational life.
Here is a list of items you should be definitely looking to repair at some point. What I have attempted to do is assign either a yearly budget cost or the full replacement cost if applicable:
Heating, Ventilation and Cooling
- High Efficiency Furnace- replacement cost is $4000
- Central Air Conditioning – replacement cost is $2000
- Regular yearly updates – $300
- Major yearly updating costs – $5,000
Landscaping, Driveway and Drainage
- Regular yearly landscaping updates – $800
- Regular yearly costs – $2,000
- Major yearly updating costs – $4000 (this would include new windows, doors, painting or brick repairs)
- Regular yearly costs – $1,000
- Major one-time costs – $10,000 (Total roof replacement including boards also remember flat roofs always cost more)
- Regular yearly costs – $250
- Major yearly updating costs – $1,000
So what’s the final tally? Take a big deep breath. You should budget $1000 to $3000 per year for the regular stuff, but for those with older homes expect to shell out between $4,000 to $7,500 per year. This should help with your budgeting so when things happen, which they will, you would have been proactive as opposed to reactive.
The following article was written by Toronto realtor, Michael McCann. This long time Toronto resident has produced articles for a number of publications including Zoomer magazine.To learn more about Toronto real estate and housing, please visit www.michaelmccann.ca. And don’t forget to follow him on Twitter @mytorontohome and like his Facebook page MichaelMcCann – My Toronto.