Easing Pain of Costly Household Repairs : Finances: You can set aside money each month, invest in service contracts--or simply sell out.

Gary Fidler could not take it anymore.

After owning a house for almost 20 years, he decided to go against the American Dream. Tired of trying to maintain his 17-year-old house, Fidler and his wife, Barbara, began renting.

“I feel that renting gives us more freedom--to go and do whatever we want to do--and more money,” said Fidler.

“They take care of everything,” he said, referring to the landlord of the twin home he has rented for more than a year.

Unlike Fidler, most homeowners do not pack up and leave because things break down. And things break down every day; it’s called entropy.

The standard cure for an appliance or fixture that loses the battle with entropy is to replace or fix it. The problem comes in deciding which to do and how much to pay.

The expenses added up for Fidler, and would have continued adding up had he kept the home. For example, he had to replace the original wiring when it began to deteriorate. That cost $5,000.

Fidler shelled out $1,200 for a septic system. Two years later, it was struck by lightning and needed to be replaced.

By moving, he saved the $7,000 he would have spent on a new roof.

Because of entropy, certain features and appliances--like roofs and stoves--will always need replacing.

But, “if you let things go . . . that’s going to catch up with you,” said Joe Cummins, director of technical training for HouseMaster of America, a national home-inspection company.

In a survey, HouseMaster calculated that homeowners spend an average of 1% to 3% of the value of their home on annual upkeep. That means that a person owning a home valued at $50,000 will spend an average of $500 to $1,500 a year.

“If you have a $100,000 house, you end up spending $1,800 for a water heater that might go,” Cummins said.

But as to when to replace or when to fix, experts agree there is no right or wrong method.

“Budget’s a factor, along with what kind of features the homeowners need or want and the age of the appliance when it breaks down,” said Caron Smith, spokeswoman for the Assn. of Home Appliance Manufacturers in Chicago. “There’s no one answer.”

Jim Hodl, associate editor of Appliance Service News, an industry trade publication, has one guideline: “For the most part, with major appliances, you can get the product fixed for a lot less than the cost of replacement. But if a repair costs more than 50% of the original price, don’t get it fixed.”

So, Hodl said, if you paid $1,000 for a refrigerator and the repair estimate is $500, it may be time to start shopping for a new one.

Part of the difficulty in deciding whether to repair or replace lies in technological advances influencing the market.

“With new technology, we’re probably not as able to predict the life of an item as we are with older technology,” said James Healy, director of education for Northamerican Heating and Air-Conditioning Wholesalers Assn.

For example, a furnace with a standard pilot light would normally last 20 years. But a newer furnace “may not last as long because it’s higher tech with a lot of components,” Healy said.

But with new federal energy-saving standards, it may be better to replace something that’s taking its last breath. With technical advances, the parts needed in repairs may become scarce and, hence, more expensive, said Healy.

Similarly, energy-saving appliances may save money over the life span of the equipment even though initial costs are high, he said.

“My recommendation would be to take a look at how long you’re going to live in the house and what your utility bills are already,” Healy said.

Bill Lynott has lived in the same Abington, Pa., split-level home for 26 years and has had to replace everything from a garage-door opener to a heating and cooling unit.

“Once you’re in a house over 20 years, you can expect to do that,” said Lynott, president of W. J. Lynott Associates, a management consulting firm that works with companies that repair appliances, and former director of customer service for Sears, Roebuck stores in the eastern United States.

Lynott’s experience has shown him that it usually isn’t wise to buy the most expensive replacement item.

“Almost everybody that makes and sells these things carries models that have a lot of bells and whistles to satisfy people who say they want a lot of special features,” Lynott said. “One notch below the top of the line is usually the place that makes the most sense.”

That level represents a model “that’s efficient and dependable but at a cost less than the most expensive,” he said.

He advised people to ask how old the appliance is and then to equate that age with its average life expectancy.

“It’s really not too different than you would do with an automobile,” Lynott said. “You’ve heard people say, ‘Well I can get another year out of this car, so I’ll go ahead and put in the $500.’ I think the logic would pretty much be the same for an appliance or household fixture.”

Of course, people may extend the life of appliances with maintenance. But even some of that depends on circumstances. Lynott said a washing machine generally can last eight to 12 years. But his held out for more than 16 years.

“That’s a long time for a washer,” he said. “My wife is very easy on that stuff. She just takes care of it, doesn’t wash real heavy loads.”

Lynott suggests setting aside a reserve for replacements.

“You wouldn’t put money aside specifically, but there would be nothing wrong with having little funds set aside for maintenance of homes,” Lynott said.

Just keep a balance on paper of what you set aside each month.

That way, when something breaks down, it makes the psychological pain less severe if you know you’ve been setting money aside for that purpose.

One other thing to check into when replacing an appliance is a service contract.

When buying an appliance, people have the option to purchase a service contract to pay for repairs for anywhere from one to five years.

“A service contract is essentially . . . buying peace of mind,” said Appliance Service News’ Hodl. “You don’t have to come up with the money to pay the repairman.”

If you would rather not bother with leaky roofs, you can do what Fidler did--sell your home and start renting.

That leaves the tough decisions to someone else.

And, said Fidler, “If you come home from work and you don’t feel like fixing something, you don’t have to.”