CITRUS COUNTY, Fla — Nancy Edwards inspects homes for insurance companies. She said, too often, homeowners are setting themselves up for a future financial burden.
"They don't look at the roofs. They don't look at the HVAC systems. They don't realize that they're setting themselves up for a big expense coming down the road," Edwards explained.
Edwards reached out to share her insight with us in hopes it could save you some cold, hard cash. She said these days, the average cost of a roof is about $20,000, and more than 25 percent of the homes she inspects need a replacement.
"It'd be nice if you could be forced to put money away. I mean, everybody says, oh, yeah, I'll save a couple hundred bucks a month for when I need a roof. It doesn't happen. So, but this way, if it's escrowed you're forced to put that money away. And when the time comes, then you can take it out," Edwards added.
Her idea is to expand escrow accounts which are used for property taxes to include major home expenses like roofs, plumbing and electrical costs.
But would it work? We wanted to share these suggestions with a financial advisor.
Dave Duquette with Impact Wealth Advisors said it's not a bad idea.
"That escrow strategy is, can we somehow force the savings mechanism to be prepared for this event and what I wouldn't want to see is that forced mechanism is in an account that's not earning anything for these people," Duquette explained.
Duquette recommends trying to save 20 percent of your gross income.
Over the years people like Edwards said too many homeowners just don't have the out-of-pocket money to pay for unexpected expenses.
It's why both she and Duquette also suggest learning more about home equity.
"The equity in your house is a valuable place to get money at times because you get all that money without tax consequences compared to if you need to withdraw from the 401k that's a big tax consequence and a penalty," Duquette added.
Edwards said upkeep is also important. She adds another costly mistake is roof staining and discoloration.
"They consider that to be algae. So, you see a lot of people these days that will come and do a low pressure wash of your roof to keep it nice and clean. That might be a good thing to do," Edwards said.
