Home maintenance costs

Investment Analysis Clubs Macro Economic Trends and Risks
1

DH and I have lived in our 1400 square foot 1987 ranch house (with adjacent 1947 cabin) since 2003. We (meaning DH plus a carpenter) replaced the roof when we converted the attached garage into a bedroom in 2010.
Remodel included:
Garage Conversion with closet rebuild, including new windows and hardwood floor
Roof replacement
Ventilation system installation including attic insulation
Septic clean-out and repair
Cabin roof repair
Assorted minor repairs around house

The total cost was $18,847. At different times we have also replaced the well pump and lining, most of the deck and the back wall of the cabin.

When the weather warms and the ground dries out I will need to get the septic tank pumped out and the concrete barrier repaired.

https://www.wsj.com/personal-finance/the-typical-u-s-home-is-44-years-oldand-needs-tons-of-work-a1fd89ea?mod=hp_lead_pos10

The Typical U.S. Home Is 44 Years Old—And Needs Tons of Work

Even a new coat of paint can be costly and complicated in an 88-year-old colonial

By Veronica Dagher, The Wall Street Journal, April 4, 2026

A home-construction boom sprouted across America in the roaring 1920s. Millions more single-family units went up across suburbia after World War II. Building surged again in the 1970s.

Now those homes are old.

More recent new construction hasn’t replaced America’s graying housing stock, meaning the age of the median home is a record 44 years, according to the Harvard Joint Center for Housing Studies.

The typical house is well past the age when the roof needs repairs and the furnace needs replacing. The extent of maintenance and modernization needs is vast, and the cost of doing it is going up fast. …

The cost of home maintenance, even after accounting for broader inflation, has jumped. Structural repair costs grew by about 14.1% in real terms between 2022 and 2024, according to the Federal Reserve Bank of Philadelphia. Plumbing jumped by 23.6%. The increase reflects the rising cost of individual parts and labor, and the larger size of necessary repairs.

This is on top of the rising costs of home insurance, property taxes and homeowners association dues, which are making it prohibitive for many to simply own a home, not to mention buy one…

Financial advisers traditionally suggested setting aside 1% of a home’s value annually for upkeep, but many now argue that isn’t enough. While 1% may cover routine upkeep, 2% to 3% provides a more realistic cushion for expected maintenance, home-improvement projects and unexpected repairs, particularly for older homes… [end quote]

I paid $185,000 for this one-acre, two house property in 2003. Zillow says it’s now worth $525,000 which blows my mind. I guess the 1% cost is based on the current inflated price since the cost of materials and labor has risen in the interim.

How old is your home? How much do you spend on maintenance?

Wendy

4 Likes
2

Why?

That’s the equivalent of a nominal IRR of 2.7% which is barely keeping up with inflation.

5 Likes
3

Poor returns on residential real estate don’t surprise me. If you put your 20% down payment of $37,000 into the S&P500 back in 1987, you’d have more than $1.8 million today.

And of course, it’s very likely that you could have rented an equivalent property for what you’ve spent on mortgage payments, property taxes, insurance, maintenance & repairs.

Rent vs. Buy.

intercst

2 Likes
4

My 15 year old condo (at the time, now 20 years old) needed to be completely redone. I.E. New cabinets, appliances, nee shower, new counter tops, new paint, new floor, new AC, new fire alarms, new ceiling fans, new baseboards, nee curtains, new light fixtures, nee toilets, new plumbing fixtures.

We did the work ourselves. (Mostly, we did not do the plumbing behind the walls as the liability is too high as a leak would put four condo’s below us at risk) We did it for about 40,000. We had been quoted about 100,000 from a contractor. Other neighbors reported about the same cost.

Note that none of this was structural, no roof, no exterior paint. The HOA spent serious money on a new roof, new sliding doors (cat 5 hurricane proof) resurfaced all concrete both balconies and entry areas, one building got new elevators and the second will need new elevators in five years. We only had one or two 2400 dollar special assessments. The rest is paid for with 750 a month HOA fees (Higher for the larger units)

20 years is about the time a home, single family or condo is about as long as home can go without serious heavy construction work. The banking industry estimates a new home has an economic life of only fifty years. At some point the infrastructure, water, electrical, sewer, roads have to be rebuilt and that adds to taxes. Additionally, in fifty years the economy around the housing changes, often making the housing more valuable as other types of real estate.

We did the work ourselves. One Saturday we painted the 9 foot ceiling in our large living area. Sunday we wanted to get up. We could not. We were much too sore.

We were late 50’s early 60’s. Now in mid 60’s we would take a very long time considering doing it again. We are not as strong, we are not as energetic, we are not as driven.

To some extent it makes sense to purchase a brand new house, or have one completely rebuilt about in ones mid 60’s with the idea that you will die in 20 years.

Cheers
Qazulight

9 Likes
5

Yep. Most people don’t account for the fact that normal maint & repairs means that you’re going to essentially rebuild your home over the 30 year mortgage period.

And if you’re going to hire a contractor rather than doing the work yourself, that doubles or triples the cost.

I had my prosthetist add a subroutine to the Robo-Leg a few weeks ago so that I can still climb a straight ladder. (I’m 70 years old.)

intercst

7 Likes
6

My house, my vehicles and my dogs although well loved, are holes where all the money goes.

Good thing at 68 my health is pretty dang good.

4 Likes
7

I don’t think most families that own a home bought it with the idea that it was an investment. It’s true that you could have earned more money in the S&P with your down payment on your house in 1987 than the appreciation of the property. If you bought a house in 1988 like I did, it was to live there without a landlord selling it out from under you, or presenting restrictions in your living area. My oldest daughter in her 30’s still rents with her family of five. She’s had three rental homes sold out from under her and had to relocate her family (with kids) over and over. A rental provides you with home security for at best one year.
The pride of ownership motivates one to update the structural integrity of the property and modernized the home from year to year. When I have toured rental homes with my oldest daughter, I consistency confront kitchens and bathrooms that have not been remodeled since the 70’s. A landlord has little interest in improving a rental, it only may marginally increase a financial gain if at all. One rental had mushrooms growing out of the carpet, and the owner said, “you can just vacuum that.”
Finally, if you bought a home in 1988, you no longer have a monthly payment for a mortgage, whereas if you’ve rented all those years you’ll still have a monthly payment for rent. So now a retired couple might pay $800 a month for property tax, homeowners insurance, maintenance & repairs. There’s a pot of gold at the end of the rainbow.

8 Likes
8

The statistics on people 60 plus and ladders is actually pretty sobering.

I gave all my ladders away but I think that someone wants me dead and they keep showing back up in my garage.

Cheers
Qazulight

4 Likes
9

A lot of small-time landlords would be happy to have a good tenant stay for 5 or 10 years. Depends on where you live.

The default in the US is that you’re smart to own and that home ownership is the bedrock of family wealth.

The arithmetic overwhelmingly says different.

intercst

1 Like
10

There’s not a landlord I’ve ever heard of that will sign a five year lease.

I never implied that at all

11

@MarkR thanks for pointing out my typographical error. I actually paid $185,000 for the property in 2003. (My mistake was because the house was built in 1987.)

That changes the IRR to 4.46%.

Wendy

5 Likes
12

I knew you would say that, @intercst ! You’re so predictable!

No mortgage. Property tax increased from $1700 to $3400 per year between 2003 and 2026. Insurance increased from $600 per year to $2054 per year.

I don’t think I could have rented for that amount. Especially since DH and I together haven’t paid a mortgage (or rent) since 1990.

Wendy

6 Likes
13

This is super relevant for my family at the moment. My brother’s and I have inherited a house that is 48 years old this year. It has had almost no updates other than a flooring rework a couple times.

The amount of deferred updates here is about $85,000 with perhaps another 20%+ in gotchas to bring it into a reasonable current state.

At your 3% rate, Wendy, it would appear that this is about 5 years of savings to “update”.

There is no question these things should be done, but I cannot fathom saving at that rate over any sort of long term, even with this home having so much to do.

On the list:

  • All bathrooms refreshed
  • Kitchen counters, cabinets and flooring reworked
  • All flooring updated
  • paint or touch up on all interior walls
1 Like
14

There is no stability or housing security in renting where I live (Jackson Hole, WY). There is an acute housing shortage, and few vacant lots on which to expand the housing inventory. When your rental gets sold, the new owner either moves into it, turns it into an AirBNB/VRBO unit, tears it down for redevelopment, or uses it for employee housing (at 2-3 per bedroom and mattresses in the garage/basement too). People living in cars or in tents in the surrounding National Forest is not uncommon. That’s no way to raise a family.

But agreed, the rate of return on the house pales in comparison to a simple investment in an S&P500 index fund, much less the investments in tech companies I was fortunate enough to focus on the past 20 years.

6 Likes
15

Adjusted for inflation the CAGR since 2003 is 2%.

DB2

16

One of the reasons I’ve been looking at CSL stock. The make building/weatherproofing/roofing materials/etc.

17

Oh, I forgot to mention…as usual, you are reasoning from your personal experience, not the Macro average.

Finding the exact percentage of “take-home” pay (net income) is tricky because most national data uses “gross” (pre-tax) income. However, by adjusting for taxes and looking at current 2026 trends, we can get a very clear picture of the burden.

While the “30% rule” is the traditional gold standard for affordability, the reality for the average American has shifted significantly.

The National Average (Gross vs. Net)

  • Gross Income Standard: As of early 2026, the average American household spends approximately 29% to 31% of their gross income on housing.
  • Take-Home Pay Estimate: When you account for federal, state, and FICA taxes, the average American’s take-home pay is roughly 75-80% of their gross. This means the average household is actually spending closer to 38% to 42% of their take-home pay on housing.

The “Rent-Burdened” Reality

The “average” often hides the struggle of specific groups. In 2026, the housing market is defined by a sharp divide:

  • Renters: Roughly 49% of all renters are considered “cost-burdened,” meaning they spend more than 30% of their gross income on rent. For these households, housing often consumes over 50% of their actual take-home pay.
  • New Homebuyers: For those purchasing a median-priced home ($413,000–$426,000) at 2026 mortgage rates (hovering around 6–6.3%), the required income to stay “affordable” is over $111,000 . Since the median household income is closer to $86,000, many new buyers are stretching to spend 45% or more of their net pay on mortgages.

These people don’t have much, if any, spare income to invest at your “predicted” SPX return. They need a roof over their head, not an investment.

As usual, the answer depends on the specific situation. Renting grants mobility. Buying grants stability if the household expects to stay in one area.

To me, the bottom line was the security of knowing I had a roof over my head if I lost my job…and eventually got old and retired. Rent payments are gone forever. Paying a mortgage and having a house that is completely owned is the protection in old age as well as the bedrock of family wealth for the average family that saves little and invests less.

Wendy

6 Likes
18

Of course, “rent vs. buy” assumes a mortgage. if capital is “free”, then owning should be cheaper.

My mortgage-free condo that I purchased for cash in 2012 costs me about 30% of the monthly market rent for the unit, And it’s more than tripled in price over the last 13 years (but still failing to beat the S&P 500) since I used a rent vs. buy calculation to inform the purchase. I didn’t buy until the depths of the 2008-2012 mortgage crisis that tossed a lot of people out of their homes. My purchase price in 2012 was 70%-off the 2008 value. Failing that, I’d still happily be a renter.

intercst

19

On the other hand, if you would have put 20% down ($37,000), the gain would have been $340,000, which is an IRR of 10.12%.

I’m neglecting the interest costs, but for a good chunk of this century, mortgage interest rates have been lower than the historical rate of inflation. So the money was borrowed in full value dollars but paid back in the future with inflation-shrunken dollars. So effectively very little to no cost.

One thing we shouldn’t neglect though, is the imputed value of rent. If you took that $37,000 and bought an index fund instead, you would have a had a bit better return, but you’d have pay rent as well.

5 Likes
20

Like my parents and grandparents before me, I have always only bought when the housing property — regardless of whether I planned to live in it or not — penciled out as a significant investment opportunity. That required two things:

  1. a willingness to look and look and look for a suitable opportunity to buy a residence with solid hidden upside opportunities while living cheaply either in it (surviving in some small space inside) or living low in small rental or space made available by a friend;
  2. a willingness to work like a madman and the skills to know what to do to rebuild/rehabilitate a home mostly on my own dime and my own time and my own steadily improving skill set.

I was born in Ft Monroe, Virginia in 1951, and the housing there was overwhelmed in the aftermath of WWII as it was the army’s HQ for planning “what comes next” after WWII. Dad was offered a nice housing allowance to go rent off base. He used it to buy a big, cheap, old, beat up with collapsing floors, “cursed” “boarding house” (actually a “house of ill repute”) in Phoebus, Virginia, the main switching yard for the C&O RR. I have photos of my 4 year old older brother under the house with him, watching and learning as Dad jacked the entire house up on its floor beams to replace both cracked foundations and rotting beams….

I’ve done the same, and the ROI can be astounding.

4 Likes