You Should Save 4% on the Cost of Your New Home Renovation
A surprising number of new homeowners experience post-purchase regret, largely due to the unexpected costs associated with the purchase, according to a new survey of 1,500 homeowners conducted on personal finance website Bankrate.
In fact, 63 percent of millennial homeowners (and 44 percent of all homeowners) have at least one regret about buying their home. What’s in # 1? Excluding maintenance and repair costs, Bankrate found out.
Paying these costs can come as a shock to new homeowners’ wallets after making a sizable down payment and spending cash to cover the costs, Bankrate said.
This finding is not unprecedented: A 2018 NerdWallet study found that 44 percent of new homeowners experienced unexpected repair costs within one year of closing. Overall, NW reports that Americans spent nearly $ 450 billion on home renovations between 2015 and 2017.
If you are looking to buy a new home, John Bodrozic, co-founder of digital home management company Home Zada, offered Marketwatch the following rule of thumb: Save one to four percent of the purchase price of a home on these contingencies in addition to your emergency fund:
“If the house is less than five years old, then one percent is the best number because the home equipment, appliances and building materials are still relatively new,” explains [Bodrozhich]. “But if the home is 20 or older, then four percent is more realistic because many of your home equipment, appliances and building materials have reached the end of their useful lives and you will need to replace them.”
According to Zillow , the average home price in the United States is currently $ 225,300, which means you will need to set aside between $ 2,253 and $ 9,012.
Plus, another 2018 Bankrate study found that homeowners spend an average of $ 2,000 a year on running costs, which means it’s another expense to consider when you save, buy, and budget. in the coming years.