How much should I budget for maintenance every year?
Reserve against what the building costs to rebuild rather than against what you paid, which is how the ownership statement in this app sizes the line. Whatever figure you use, it arrives lumpy: nothing for three years, then a roof.
The one percent rule of thumb, quoted against the purchase price, is the version everybody repeats and it is wrong in both directions: against price it over-reserves a condo on expensive land and under-reserves a large house on cheap land. What wears out is the roof, the furnace, the windows and the kitchen, so this app applies its rate to a rebuild cost band instead, and both the rate and the band are figures this repository holds rather than survey results.
Adjust it for the house rather than for the price. Original systems in a house past fifty mean several of them reach the end of their service life in the same few years, and a recently built house with everything under warranty defers that spending rather than escaping it. A condo unit is different again: the fee already funds the building's exterior and common elements, so your own budget covers what is inside your walls, and special assessment exposure sits outside the budget entirely.
The better method once you own the place: list every major system with its age and its replacement cost, divide each cost by its remaining years, and sum. That gives you a sinking fund figure specific to your house rather than a rule of thumb, and it tells you which year is going to be expensive.
Keep it in cash. The point of the fund is to be available the week the furnace dies in February.
What it depends on
- the age of the systems in the house
- whether it is a condo unit or a freehold
- what the building would cost to rebuild, which is not what you paid
Next questions
What home maintenance do I actually need to do?
Seasonally: furnace filters and service, gutters twice a year, grading away from the foundation, dryer vent, alarms, and winterizing outdoor plumbing. Everything on that list is cheap and prevents something expensive.
Ontario
How old is too old for a roof, furnace or water heater?
Asphalt shingles last fifteen to twenty-five years, a furnace fifteen to twenty, an air conditioner twelve to fifteen, a water heater eight to twelve, and windows twenty to thirty. Anything within five years of the end of that range is a cost you are buying.
Market practice