How to Budget Home Repairs & Renovations for First-Time Home Buyers

Your future home expenses won’t keep you up at night when you know you’ve got a plan set in place.

After years of thinking and considering, you are finally ready to take that step into home ownership. You have enough saved for a down payment and even a little in your emergency fund. But, have you thought about potential renovations or maintenance? These things could cost you a pretty penny but you don’t have to shy away from them.

Let us ease your mind by helping you prepare for the costs of these potential burdens upfront.

Set Up Automatic Deposits into Your Savings

Your savings may be what you carries you through the entire home buying process. Setting up automatic deposits into your savings each paycheck will begin to accumulate. Talk with your Concord Mortgage lender to see how much of your home value you will need to be saving. It may seem scary to start withholding money from your paycheck but you virtually will not be able to see or touch the money and it will go towards a nice-sized down payment.

Ballpark the Numbers

It’s always a good idea to have a price in mind when it comes to upgrades, this will put you and your bank account in a better place. Depending on the upgrade, prices can range from $100 to $1,000. Consulting a professional about price per square foot will be beneficial and make the decision to go forward much easier.

Prepare 5 Years in Advance

Planning in advance is smart; planning in advance for 5 years is smarter. While things may not go exactly how you wanted them to, having even an outline will help you out. Things break and things go wrong. Knowing what appliances in your home are close to croaking are essential and can save you some money down the line. Having a home inspector come in will be able to give you a guesstimate of each item. You will then know when and what it will take to replace them.

It’s impossible to know how much a new washer and dryer will cost you in the next five years. But, saving a little money each month could get you where you need to be if and when that time comes. Try creating a list of your 5 year renovation/repair plan, how much to save and even a little extra for those unexpected times.

 Prioritize Your Savings

Knowing what is a want versus a need is important. Home renovations are usually a want and repairs are a need. Adding an addition onto the garage to store your jet ski sounds cool but if your air conditioner is on its last leg, that takes precedence. Don’t drain your bank account with home upgrades so much that when it comes time for having regular maintenance money you are clean out. You will regret it.

Make the Project Fit Your Budget

Go big or go home applies in Texas, but not necessarily in home renovations. Start small and work your way up if you have to. Consult a contractor to see what things will cost and strategize a way to stick to your budget.

Options include:

Low-cost alternatives: Instead of purchasing granite counter tops, specify laminate. Or, if you need to repair flooring, consider a cheaper alternative to whatever your preference is.

Keeping older items that still work: Appliances, furnaces and lighting fixtures can all be upgraded later. If it ain’t broke don’t fix it!

Make the project smaller: Trim down your bathroom addition. A new shower is essential but adding jets in the bathtub is not. Scaling down will save you time and money.

Buy it yourself: You can save a boat load of money on home projects if you purchase the materials yourself. Before purchasing, talk to your contractor to see which items you don’t need to buy.

Expand Your DIY Knowledge

First-time buyers may be nervous to take on maintenance tasks themselves. Coming from a rental property, you are used to having the landlord take care of the big things. However, Millennials are also tech-savvy which allows them to get on sites like YouTube and research how to accomplish these tasks. Despite what you may think, many home repairs and renovations can be done on your own. All you need is the proper tools and time. Be careful of things that require a professional and know your limits.

Factors to Consider

Age: Home age plays a big factor on when maintenance needs will kick in. For a newer construction you can expect little to no maintenance. If you have fallen in love with an older beauty, chances are the home renovation costs are no so beautiful. That is not to say you shouldn’t purchase an older home but you will want to have a little more money saved up, just in case.

 Weather: If you are one of those people that enjoy a cooler climate including ice and snow, your home may be subject to wear-and-tear. Similarly, homes in warmer climates with hurricanes or tornadoes will experience wear-and-tear as well. Bottom line: if your home is in an extreme climate be mindful of the toll weather can take.

Condition: The condition of a home mostly depends on its age. Homes that are 100+ years old may have been well taken care which is why it has lasted so long. Other homes may be old and have been treated as such.

Simple: The older the home, the more care it will require.

Location: In addition to climate affecting a home, location can as well. If you’ve purchased a home in a flood zone or at the bottom of a hill this will have an impact on how much care your home needs.

Type of Home: If you are looking at a single-family home, prepare to have a bigger budget. You more than likely will be doing most of the maintenance yourself which includes: the roof, siding, gutters and maintaining the yard. A condo will not need as much attention since the outside is taken care of by the HOA (Homeowners Association).

Your home will probably be the biggest investment you make, and you owe it to yourself to make the necessary repairs and renovations that will increase its value as well as your enjoyment. Take your time and be smart with your money. Instead of purchasing frivolous things, put that money away for emergencies. Trust us, those saved up funds will come in handy one day.