Being a homeowner is something many people aspire to, yet it comes with its own unique set of responsibilities and hazards. You have to factor in major repairs as well, which can quickly escalate into the thousands of dollars, so you must be prepared should the worst happen.
Rainy Day Funds
When you rent, the property owner is the one responsible for all repairs, both large and small. That means when you own a home, the burden falls upon you to handle these repairs. If you don’t have a rainy day fund, and you need major work done to your roof because of a catastrophe or lack of maintenance, you may be out between $4,900 and $14,100 for a replacement. Depending on the material of your roof, you should expect replacements every seven to 30 years, on average. If you have an aging home, it may be sneaking up on you, especially if you notice any visible damage. You should start saving with each paycheck to ensure you can afford whatever repairs and replacements fall into your lap.
Most mortgages will require you to purchase homeowners insurance, but you must establish what your policy offers and what you will be liable for. The three main types are dwelling coverage, contents coverage, and personal liability. Dwelling protects the property itself but isn’t totally inclusive, whereas contents will cover what you put inside, such as furniture and electronics. Personal liability will handle any bodily injury suffered due to accidents. Yet, depending on your state, you may not have the coverage to ensure your home is protected. This is another reason why you need an emergency fund.
FAIR plans were created by the government but are managed by home insurance companies. These plans provide coverage for people living in areas like California and Florida that might otherwise be impossible to insure. They are pricey, however, but they can be worth it should a natural disaster strike. What’s more, this coverage may be required for your mortgage. However, you cannot get one because you live in a dangerous area; you will have to take the proper steps to mitigate the chances of experiencing a disaster.
Invest in Warranties
One way to save money and protect your assets is to get home warranties when they are offered. If the boiler that comes with the home has one in place, it is wise to extend it once it expires so you do not need to spend thousands for a replacement should something go wrong. This applies to all large appliances and electronics, but doubly so for ones that are essential to your household, such as boilers and water heaters. By adding warranties or extending existing ones, your savings and credit remain safer and intact.
Pick Your Contractor
Part of mitigating the price of repairs is finding a suitable contractor for the job. Do thorough research before you choose someone, and it benefits you to know what, exactly, you want done to avoid additional charges. Whomever you choose should be fully licensed and be willing to work out a payment schedule with you if costs escalate. Always get multiple bids, and do not simply go with the lowest, as they may not give you the quality that will last. Instead, look at reviews and use word of mouth to find reputable workers. Lastly, never go with a contractor who pressures you to get things done immediately or demands a cash deposit. Those are signs that they are not reliable; instead, they are probably looking for a quick buck.
Owning our very own property is a dream come true. However, that dream can cost us a fortune if we don’t plan and prepare for pricey repairs. Save up, get the right policies, and know how to find a good contractor to ease your mind, and let you enjoy this wonderful occasion.