Janet Mason 
When you bought your home, you may have also bought into the promise that homeownership is synonymous with wealth. But now that you’re responsible for repairs and maintenance, it’s beginning to feel like you bought into a lie. Homeownership is not for the faint of heart or the financially irresponsible. Deferred maintenance can have costly and dangerous consequences that strip away the asset’s wealth-building potential. Protect your home and your long-term financial wellness by taking simple steps toward streamlining your home maintenance process.
1. Customize Your Home Insurance
Protecting your home against disasters, accidents, and liabilities is crucial for securing your investment. While you may already hold home insurance as a prerequisite from your lender, you may not have reviewed the terms. Lenders’ main concern is covering the value of the asset they have a lien on, not the value of coverage. You may be overpaying for coverage you could get from another provider or may be missing essential coverage.
Standard-issue home insurance typically concerns the dwelling, while living expenses and its contents rely on a formula. Each insurer is different, so when you call for a home insurance quote, get the declarations page to compare. Get three or more quotes from large and small companies and make sure the quotes have the same coverage limits. Each company will differ on how they handle replacement costs, especially on roofs with a high claim rate.
Pull the details from the declaration pages and compare the deductibles. Watch for differences in deductibles for certain claims and coverage limitations. Some insurers don’t offer basement backup coverage when your home has a basement, so be sure to add it. A sump pump overflow or flood can ruin everything it touches, including everything in your basement utility room.
Get variations of your quotes with higher and lower deductibles to see if your monthly costs change. Generally, a lower deductible will mean a higher premium rate, but it can help you manage out-of-pocket expenses. Once you find a quote and insurer you like, work with them to bill you or your escrow account. Fund your escrow to cover the difference if you get a premium refund from your prior insurer. This will help you avoid an escrow shortage, which will increase your monthly mortgage bill or require a one-time payment.
2. Create and Complete a Comprehensive Maintenance Schedule
Life gets busy, and if you don’t plan, you could be surprised when your air conditioner starts clunking. Deferred home maintenance is disruptive at best and costly at worst. Review your home’s mechanical equipment and create a comprehensive maintenance schedule for caring for it.
Generally, your heating and air mechanics will need an annual tune-up and check before they’re turned on. Schedule these check-ups in advance to create the least disruption to your schedule and allow time for repairs. If your fan motor needs to be replaced, you don’t want to be out of air conditioning in the middle of summer. Include homeowner maintenance, like changing your furnace filter monthly and draining your water heater annually.
Use your go-to digital calendar and create a home maintenance layer that pushes alerts to keep you on time. If you share home responsibilities with others, share the calendar with them, too. Use easy-to-remember logic, like the same day of the month or day of the week, for home tasks. Include safety checks, too, like ensuring your smoke and carbon monoxide detectors’ batteries work to keep everyone in your household safe.
3. Include Home Maintenance Into Your Budget
Typically, your credit check that determines what you can afford is strictly reserved for your mortgage payment. However favorable your debt-to-income ratio may be, the reality is that home maintenance costs are on the rise. Recent reports show that homeowners spend nearly $1,200 monthly on home maintenance costs. While your home’s components and your preferences can guide this number, it doesn’t eliminate the impact of inflation for essentials.
As you review your home maintenance calendar, consider which tasks are nice to have and which are required. Your lawn may look better with professional treatment, but you should budget for it if you hire it out. Compare the cost of hiring out versus the time you save to help you decide what to keep. Maintaining a home irrigation system is essential to ensure its operation. Deferring maintenance would render it useless and pose a risk of foundation damage.
Next, identify an amount to budget for each month that covers what you’ve committed to or expect to pay. Schedule an automatic transfer on your pay date to sweep this amount into a separate savings account. When you have a maintenance expense, draw from this account to cover the cost. If you have a home insurance claim, let excess amounts roll over to fund future replacement costs or deductibles. When you include maintenance costs in your budget, you shouldn’t be without what you need to care for your home.
Let Your Home Be a Wealth-Building Tool
Homeownership has long been heralded as the “American Dream,” and it can be — if you plan and budget well. Make thoughtful decisions on your home insurance, include maintenance and repairs in your budget, and invest wisely. Know your limits both in skillset and financially, and you’ll create a home you love and build equity.
