What is Operation & Maintenance Cost of a House?

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Operation costs are those costs which need to be spent for operating the house.  We have listed all such costs here which are required to be incurred for running the house. The main components are costs of energy, cleaning and maintenance. This does not include the cost of maintaining the family i.e. livelihood expenses.

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It is important to understand O&M cost of the house and office.

If you have a planned shifting to a bigger home, or moving from rented house to being a homeowner, you might have done a lot of calculation. However, there are some key point often get overlooked: how much you will shell out every year for operation & maintenance? When you add up cost of operation & maintenance for every year it might discourage you from buying a more expensive property and rental property might appeal you more.

Operation Costs;

  • Society Maintenance charges if applicable
  • Electricity Bill : energy cost
  • House Tax, payable to Municipal or Panchayat authority including water ,sewerage etc., charges.
  • Cost of Insurance of house i.e. premium
  • Security charges : Salary of Guards, Waterman etc., CCTV and Sensor charge etc.
  • Water charges, if any other than house tax to other authority / party

Cost of TV, Internet and other services like gas charges etc., are included in Livelihood expenses as they are not spent on basic building.

Maintenance Costs: (These does not include major repairs)

If you don’t maintain the house, it will fart degrade and decay affecting health and safety of occupants. It is also essential to maintain its good appearance and operating it at maximum efficiency. Ofcourse the rate of decay and deterioration shall depend on its design, quality of materials and workmanship, its function and location.

There may be

  • Planned maintenance
  • Preventive maintenance
  • Corrective maintenance
Also Read : List of Documents Required for Home Loan

Maintenance costs are the those costs which one needs to spend for maintaining the house in good and habitable condition over its life. It does not include major repairs as well as major replacements which one may do over a period of time depending upon one’s ever changing living standards and life style.  The major maintenance costs are as follows :

  • Minor repairs at 0% to 0.5 % on cost of construction every year depending upon its age. The cost of construction is to be considered shall be the current prevailing one.
  • Painting every 3-7 years depending upon type of paint* being used
  • Waterproofing on terrace every 10-15 years :
  • Anti Termite treatment at every 20 years :
  • Door-window repairs including fixtures, glass, locks etc.
  • Replastering or plaster repairs
  • Plumbing repairs including change fixtures at 20-25 years
  • Paving repairs
  • Furniture repairing at 0.5% to 1% of furniture cost :
  • Curtains every 5 / 10 years depending upon quality used.
  • AMC for air conditioner, RO plant, Solar Heater within the house and other appliances
  • Preventive maintenance costs : When would happen.
  • Landscaping and Garden Maintenance

* Each paint depending upon its types and quality has different life and different frequency of repainting.

Elements like M.S. grills would need frequent paints at every five years.

If one ignores required spending on maintenance costs, you will land into major repairing expenses at a later date.

Also Read: Difference Between Cost, Price & Value.

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