There are some very popular programs available for first time home buyers that encourage the least possible amount of money out of pocket in order to buy a home. The problem with these programs is that they often place individuals who can’t actually afford to buy a home in a home.
The term afford must be carefully defined. To be able to afford something does not mean that you can meet the monthly payment. It means that once you’ve met the monthly cost, you can still implement a healthy plan of attack for your future, which includes retirement savings, and savings for deferred maintenance on your home.
Deferred maintenance is a term that we don’t typically learn until after we’ve experienced the “emergency” of replacing an air conditioner, or a water heater, or a roof. In representing buyers and sellers I have seen many homes that have experienced deferred maintenance neglect simply because the home owner didn’t think of those expenses over the long haul.
Every house will be different, but one thing is certain, houses will wear over time, and their systems will slowly deteriorate, and will need to be either repaired, or replaced. Those costs, such as a new A/C unit, or a new roof, or resurfacing the pool, are all deferred maintenance costs that need to be counted now, so they can be completed later.
There’s a simple formula for calculating deferred maintenance. Simply divide the total cost of the repair or replacement by the number of months that pass between replacement or repair. Add that amount to your costs every month and consider that part of your housing budget. Now the only thing you need to do is make sure that you leave that money alone until the time comes that you need to actually do the maintenance.