During an open house, especially for a first-time buyers, it’s easy to be swayed by a renovated kitchen, a modern bathroom, or bright, sun-filled rooms. You can already picture yourself living there.

But behind that first impression lies an undeniable truth: every property requires maintenance and, sooner or later, repairs. That’s when the 3% rule comes into play.

What is the 3% rule?

After an inspection, it’s almost always possible to identify upcoming work. To avoid unpleasant surprises, a good practice is to set aside about 3% of the property’s value for maintenance costs over the next few years.

Example:
For a $500,000 home, you should anticipate around $15,000 in potential repairs or adjustments (replacements, minor renovations, hidden elements not immediately visible, etc.).

Why is this rule essential?

• It helps you avoid unpleasant surprises;
• It allows for realistic budget planning;
• It reassures buyers by providing a clear framework.

And if the actual costs turn out to be lower? Even better, it means the home has been well maintained.

If they’re higher? You’ll have had the foresight to build in financial flexibility.