How to Budget for Home Maintenance

Courtesy of Pillar to Post Home Inspection
It's important for home buyers to remember that all homes, old or new, need ongoing maintenance.

First, buyers should understand the 1% rule. This rule postulates that normal maintenance on a home is about 1% of the value of the home per year. For example, a $250,000 home would require $2,500 per year to maintain. This would be enough to replace the roof covering...and then, a few years later, to replace a failed hot water tank...and then a few years more until a new central air system is required.

Then there is the 3% rule. Some experts say that home buyers should plan on spending 3% of the value of the home in the first year of ownership. This is because new homeowners will most likely have to buy drapes, blinds, a washer and dryer, a stove, maybe even a new roof covering. Also, new homeowners often customize the environment to their taste, so they need to budget for repairs, replacements and maintenance.

In addition, most home components have fairly predictable life cycles. For example, the typical life cycle of a high-efficiency furnace is 15 to 20 years. What this means is that most high-efficiency furnaces last between 15 and 20 years.

One way to know the extent of the maintenance needed and the costs to repair and/or replace items is to have a home inspection conducted. Home inspectors are required to let the buyer know if a component is significantly deficient or if it is near the end of its life cycle (service life), and a reputable home inspection company may offer up-to-date repair-cost guides to help clients with their planning.

Home inspectors work with Realtors and buyers to help them understand the issues that are found in the home, regardless of age, offering the right perspective and objective information. Home buyers need to understand that it's normal for items in a home to wear out. This should be regarded as normal "wear and tear" and not necessarily a defect.

A good home inspection determines the current condition of the house, offering a report of all the systems and components in need of maintenance, service, repair or replacement.

For example, consider a home inspection that uncovers that the heating system is old and requires replacement. A home buyer may see this as a huge problem. However, this problem may be the only item in the home that requires attention. If a buyer were to look at this situation in perspective, this home could be well above average-a home merely requiring a new furnace.

A good home inspection provides objective information to help the buyer make an informed decision. Knowing what items need to be budgeted for repair or replacement will help home buyers plan or negotiate better and not be stuck with unexpected costs of hundreds, or even thousands of dollars in the long run. Also, fixing these items will make a marked improvement on the performance of a home and minimize issues that could affect its future integrity...and value.
To find a licensed Home Inspector near you, contact Lyn at 604-724-4278.

Knob and tube wiring is usually found in homes built about 50 years ago that have not had the wiring updated. Knob and tube wiring gets its name from the insulator knobs used to keep the wires isolated from objects and the ceramic tubes used to line holes through wooden floor joists. You may find it with older 60 amp services.

Although the actual wire used may be no different from that used today for the most part, it consists of only a hot (black) and neutral (white) wire with no ground wire. Both wires must run separately to fixtures as opposed to those used now which are contained within one plastic sheathing.

Knob and tube wiring can be safe and functional. Hire a qualified electrician to inspect the wiring to determine its safety. With proper documentation from a certified electrician many insurance companies will readily insure your home. While I have safely owned many homes with knob and tube, there are some issues to be concerned about, such as, the fact that there is no ground wire, which may be an issue for today’s lifestyle, high electricity usage and technology. Also, there are potential fire hazards with the break down of the insulation around the knob and tube wiring that comes with age, and should the black and white wires make contact.

In recent years some home insurance companies have begun to refuse to insure homes with knob and tube wiring, however, there are companies that continue to offer regular priced policies for homes with knob and tube, and others who ask a premium for this insurance. If you have any qualms about the safety of your knob and tube wiring, you can hire an electrician to update your home wiring. Be sure to get a quote, and expect to pay more to update a two- or three-story home, than you would for a bungalow. Keep the receipt to show prospective buyers when it comes time to sell.

If you intend to purchase a home in an area where knob and tube wiring was used then ask your realtor for advice on securing insurance and peace of mind. Your realtor may recommend the use of a condition in your offer to purchase that allows you the buyer to satisfy yourself that the house is insurable. That way you won’t be stuck struggling to find insurance right before closing.

Electrical Dangers in Homes With Knob and Tube Wiring

by Brian Cook, May 2007
Based on about 100 home electrical safety surveys that I have conducted done over the past 6 months, I have found only one home with dangerous knob and tube cabling. In this house the hazardous knob-and-tube wiring was a direct result of over fusing which resulted in over-loading of the conductors followed by insulation breakdown. With this home I rated the home high risk and presented that the home be rewired. The homeowner has done so.

A common danger relating to knob and tube wiring is the use of electrical devices requiring grounding that are connected to "ungrounded, 3-prong receptacles" (found in virtually all homes examined). This situation, the "lack of ground" can easily be remedied with the replacement of the ungrounded 3-prong receptacles with GFCI receptacles (or GFCI protection at the panel). This is an excellent solution that in my opinion provides equal if not better ground protection than standard 3-prong grounded receptacles.

A second danger relating to knob and tube wiring is the implementation of "Handyman add-ons". These add-ons are often found, though not exclusively, tapped into existing knob and tube circuits. Handyman add-ons can be very dangerous, consisting of, for example undersized wire, open splices, poor connections and/or dangerous placement or type of device to which it is powering. My findings show that dangerous "Handyman add-ons" are not limited to homes with knob and tube wiring, but related to the age of the house. Regarding homes with serious electrical hazards, I have found a particularly high incidence in homes with secondary suites, a result of the homeowners doing the wiring themselves or by unlicensed electricians.
Interestingly, in all homes examined, I have conducted "voltage drop test under loading", an excellent test to determine the conductivity of the conductors, thus a presentation of electrical heat dissipated in the conductors and connections enroute. Any poor connections clearly show up whether the cabling be knob-and-tube, aluminum, or modern wiring. Poor electrical connections can lead to arcing followed by fire. My findings show that if there has not been "handyman tampering" the conductivity of knob-and tube circuits has been by-in-large superior to that modern cabling (1). This is likely due to the soldered connections and the shorter wire runs of knob and tube wiring.
A final mention: Of significant concern is dangers of service supply conductors (home powerline). The two very dangerous concerns that have found have been (a) broken "Emily knob" (in 3% of homes) and (b) trees applying pressure to service-supply conductors (in 26% of homes), causing tension on the conductors which could lead to a broken Emily knob. Once the Emily knob has detached from the house, the service supply conductors are at high risk of becoming detached at a point close to the side of the house. This can, and has led to fire outbreak.

In summary, electrical hazards have been found both in homes with and without knob and tube wiring, but the hazards have by-in large not been related to the knob and tube wiring itself. Homes with significant hazards have by-in-large been related to (a) the age of the house (the number of years where Handyman tampering could have occurred), (b) the application of the house (secondary suite or not), and proximity of trees to the service supply conductors. A comprehensive electrical inspection by qualified personnel is the only sure way to identify if and where there are electrical hazards.

Brian Cook
BCTQ Electrician, Field Safety Representative (Electrical) and owner PowerCheck
1. Voltage drop test under loading: Canadian Electrical Code states that at full load values within 5% are acceptable. Modern home wiring circuits typically show values in range of 4 to 4.5 %; Knob & tube circuits most often measure values in the range of 1 to 2%; On aluminum wiring circuits I have measured values exceeding 10%. This additional voltage drop is likely due one or more poor connections enroute to the receptacle, and must be repaired. A 1500 watt load (e.g. an electric kettle) connected to a circuit with a 5% voltage drop at a poor connection yields 60 watts heat generated at that connection. This would be comparable to the heat generated from a 60 W light bulb; most dangerous and must be repaired.

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