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By MoneyTips
October 19, 2016
Photograph by Jeff Harris for Money; Prop Styling by Renee Flugge

Homeownership can be expensive. Disposable income may be scarce for first-time buyers who stretched themselves to raise enough capital for the home purchase. It can therefore be quite a shock when maintenance and repair costs turn out to be more expensive than first thought.

Read More: Confidence Gap In Home Buying Between Men And Women (Infographic)

Most people are aware that money should be set aside for essential repairs and maintenance, but many might not realize how much. On average, homeowners spend between 1 and 4 percent of the value of their home on its upkeep each year. This means that on a property costing $300,000, up to $12,000 could be needed for maintenance and repairs. For first-time homebuyers especially, this might seem a staggering amount of money, particularly if they have no savings. It is thus vital to factor these costs into a budget and to create an emergency fund. This fund should contain enough money to cater for six months worth of living expenses.

Read More: Wells Fargo Launches New Campaign Aimed At Millennials

Having an emergency fund also helps when large, unexpected payments arrive. For example, some people have mortgages that don’t automatically include property taxes and homeowners insurance with the monthly home payments. In such circumstances, a single, larger payment is taken later. It’s easy to forget about this until the bill arrives, so budgeting is important.

Read More: 10 Ways to Spend $10

Owning property can give people a greater sense of belonging and security than renting might. However, it is important to understand the realistic costs of maintenance and repair expenses to ensure that personal finance is not adversely affected.

Advertiser Disclosure

The purpose of this disclosure is to explain how we make money without charging you for our content.

Our mission is to help people at any stage of life make smart financial decisions through research, reporting, reviews, recommendations, and tools.

Earning your trust is essential to our success, and we believe transparency is critical to creating that trust. To that end, you should know that many or all of the companies featured here are partners who advertise with us.

Our content is free because our partners pay us a referral fee if you click on links or call any of the phone numbers on our site. If you choose to interact with the content on our site, we will likely receive compensation. If you don't, we will not be compensated. Ultimately the choice is yours.

Opinions are our own and our editors and staff writers are instructed to maintain editorial integrity, but compensation along with in-depth research will determine where, how, and in what order they appear on the page.

To find out more about our editorial process and how we make money, click here.

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