Every home needs ongoing care to hold its value. When we talk with homeowners about a care plan, we start with a realistic estimate of what the home is likely to need each year. That estimate should make sense for a $500,000 home and for a $10 million one.
Why the usual rules of thumb fall short
You may have heard "set aside 1-4% of your home's value each year." It's easy to remember, but it treats every dollar of a home's price the same, and they aren't:
Much of a home's price is the land. Land doesn't need a new roof or a furnace tune-up. In higher-value markets, land makes up a bigger share of the price.
Higher-value homes usually have more to care for. That means more systems, finer finishes and larger grounds for each dollar of house.
These two effects pull in opposite directions. So a single flat percentage overestimates what some homes need and underestimates others.
How we think about it
Our estimate is built from four parts:
The house, not the lot. We weight care more on the value of the structure itself, the part that ages and wears.
A care rate that keeps the home whole. Every home wears a little each year. The rate reflects the care needed to offset that wear. That includes routine service and steady saving for big replacements: roof, HVAC, water heater, appliances and exterior paint.
Complexity. Pools and spas, generators, zoned HVAC, smart-home and security systems, irrigation, specialty roofing and custom finishes all add to the care a home needs.
A baseline. Some care is needed every year no matter the home's value: inspections, filters, gutter and dryer-vent cleaning, and minimum service visits.
The result: yearly care costs rise steadily with home value, while care as a percentage of value eases gently. At our Recommended level, that's about 1.5% of value for a $500K home, 1.3–1.4% for homes from $1M to $3M, and about 1.2% at $10M. Costs follow a smooth curve, with no sudden jumps between price ranges.
Three levels of care
Band | Structure rate | Base | What it covers |
Essential | 1.10% | $1,000 | Routine upkeep and some saving for replacements; some work put off |
Recommended | 1.75% | $1,500 | Preventive care plus fully funded saving for roof, HVAC, water heater, appliances and exterior paint |
Comprehensive | 2.75% | $2,500 | Everything done by pros, to a white-glove standard |
What adjusts the estimate
Every home is different, and your Home Evaluation fine-tunes the estimate for yours. Things that move it up or down include:
Age of the home: newer homes need less; homes 30 to 60+ years old need more.
Climate: freeze-thaw cycles, coastal salt air, hurricanes or wildfire risk.
Pools and spas.
Large grounds: an acre or more.
Estate systems: elevators, whole-home generators, and specialty roofs such as slate, tile or copper.
Home value | Recommended / yr | Per month | Essential–Comprehensive / yr |
$500K | $7,600 | $635 | $4,900–$12,100 |
$750K | $10,800 | $900 | $6,800–$17,100 |
$1M | $13,900 | $1,160 | $8,800–$22,000 |
$1.5M | $20,100 | $1,680 | $12,700–$31,800 |
$2M | $26,200 | $2,190 | $16,500–$41,400 |
$3M | $38,200 | $3,190 | $24,100–$60,200 |
$5M | $61,400 | $5,120 | $38,700–$96,600 |
$7.5M | $89,200 | $7,430 | $56,100–$140,300 |
$10M | $116,000 | $9,670 | $73,000–$182,400 |
What's not included
Running costs: utilities, insurance, property tax, housekeeping and household staff.
Optional improvements and projects: remodels, additions, upgrades, redesigns and other elective work. The estimate covers caring for the home you have, not changing it.
Uneven timing: big replacements don't happen on a schedule. We spread them evenly across the years, but a year with a new roof can cost several times the average.
Example: a $1.1M home near Philadelphia, built in 1955
Picture a roughly 3,000 sq ft colonial in the Philadelphia suburbs, bought for $1.1 million. It's about 70 years old, and like most homes that age, it has had its major systems replaced along the way. It has no pool. Winters here bring many freeze-thaw cycles, which are hard on roofs, masonry, gutters and driveways.
Recommended care budget: about $18,300 a year, or roughly $1,530 a month (about 1.7% of the home's value).
Here's what that number is made of. About half of it isn't spent in a typical year. It's set aside so big replacements are already paid for when they come due.
Routine care, about $7,650 a year
Service area | What's included | Per year |
Heating & cooling | Two seasonal tune-ups, filters, minor repairs | $600 |
Plumbing & water heater | Flush, leak checks, fixture repairs | $500 |
Roof & gutters | Gutter cleaning twice a year, roof and flashing inspection | $700 |
Exterior upkeep | Power washing, caulking and sealing, deck and patio care | $1,200 |
Yard & trees | Seasonal cleanups, pruning, arborist visits | $1,500 |
Pest prevention | Termite and pest protection | $500 |
Chimney & fireplace | Yearly sweep and inspection | $350 |
Safety | Dryer vent cleaning, smoke and CO detector checks | $250 |
Basement & foundation | Sump pump test, grading and drainage checks | $300 |
Seasonal prep | Winterizing hose bibs and irrigation | $250 |
General repairs | Doors, windows, drywall, electrical fixes, small handyman items | $1,500 |
Savings for major replacements, about $9,350 a year
Each amount is the replacement cost divided by how long that item typically lasts.
Item | Typical cost · lifespan | Set aside per year |
Exterior paint & trim | $15,000 every 8 years | $1,900 |
Roof | $30,000 every 25 years | $1,200 |
Kitchen & laundry appliances | $15,000 every 13 years | $1,150 |
Windows & exterior doors | $40,000 every 35 years | $1,150 |
Heating & cooling system | $20,000 every 18 years | $1,100 |
Older-home updates (sewer line, electrical panel, pipes) | $25,000 every 30 years | $850 |
Driveway, walkways & patio | $15,000 every 25 years | $600 |
Deck & fencing | $12,000 every 20 years | $600 |
Floor refinishing | $8,000 every 15 years | $550 |
Water heater | $3,000 every 12 years | $250 |
Cushion for the unexpected, about $1,300 a year: leaks, storm damage and surprise failures that no schedule predicts.
Routine care ($7,650) plus replacement savings ($9,350) plus the cushion ($1,300) comes to about $18,300 a year. Costs and lifespans are typical figures for the region and are shown to illustrate the estimate. A Birdwatch Home Evaluation replaces them with what your home actually has and what shape it's in.