How to Budget for Building Maintenance Costs

Suppose you’re a commercial office space owner in Phoenix. Hundreds of people work from your facilities, and you’re making serious revenue. But all of a sudden, you get a call that the central air conditioning just broke down in the middle of August.

An HVAC maintenance technician confirms it’s a major issue that will cost tens of thousands and take several weeks to repair, and your renters are demanding a refund for the month since they can’t use the space in the sweltering heat. To make matters worse, the issue could have easily been prevented had your maintenance team performed a routine maintenance inspection just a few months prior and caught the problem before it got worse.

This reality is all too common. Building maintenance can be costly and challenging to manage, and without a preventive maintenance plan, a major infrastructure failure can happen out of nowhere, costing thousands in repairs and leaving your building closed for months on end. 

Fortunately, there are ways to effectively budget for building maintenance costs and schedule preventive maintenance tasks to keep your facility fully functioning. Here’s your guide on everything to know.

What Is Building Maintenance? 

Building maintenance is just what it sounds like — performing maintenance tasks to ensure that a building or facility remains functional and safe. This process applies to residential and commercial buildings. 

Let’s suppose you’re a business owner with a commercial manufacturing facility. One day, you and your facility maintenance team come into work and notice that the power is out. After some inspection, it turns out that your generator was leaking fuel. 

To alleviate the issue, your maintenance tech replaced the fuel tank and filled it up with fresh oil. With proper building maintenance, your power is back on, and your staff is able to get to work. 

Industries That Require Building Maintenance

Performing maintenance is important for any type of building. Here are specific examples of the types of buildings and the variety of tasks they require. Keep in mind, the specific costs associated with performing building maintenance at these facilities vary greatly depending on the size of the building, regulatory standards in your sector, age of the facility, amount of foot traffic and geographic location, to name a few.

Commercial Office/Retail Building

Commercial buildings where people work and shop need regular maintenance to ensure their continued comfort. 

Industries: Corporate office space, shopping centers/malls, retail stores, business complexes

Common types of maintenance tasks involve:

• HVAC systems
• Electrical system
• Elevator maintenance
• Janitorial services
• Pest control
• Fire safety systems 

Healthcare

Industries: Hospitals, clinics, medical facilities, nursing homes

This sector is obligated to meet stringent health regulations by performing regular facility maintenance, involving: 

• Medical equipment maintenance
• Waste management
• Water systems maintenance
• Sterilization, sanitation and other cleaning services

Residential

Industries: Apartment complexes, condos, gated communities, multifamily housing

General maintenance tasks performed on residential properties involve:

• Plumbing maintenance
• Landscaping and grounds maintenance
• Roof and structural maintenance
• Pool and recreational area maintenance
• HVAC systems
• Electrical systems

Government

Industries: Municipal buildings, post offices, libraries, courthouses

To ensure the safety of government workers and citizens and meet regulatory standards, common government building maintenance processes include:

• Building accessibility
• HVAC and energy systems
• Lighting and electrical maintenance
• Roof and structural integrity
• Security systems
• Grounds maintenance

Different Building Maintenance Costs

As you can see, there are common building maintenance services that almost every type of building requires, regardless of industry, like monitoring HVAC and electrical systems. Here are several building maintenance costs you need to budget for when managing your physical infrastructure:

Labor Costs

Whether it is hiring a janitor to sweep the common-area floors or bringing in an electrician to perform more complex electrical systems work, a core component of property management and building ownership is paying tradesmen to monitor and maintain the infrastructure. 

Equipment, Supplies and Tools 

In order for your janitor to sweep, they will need a broom. Building owners can expect to regularly buy general maintenance equipment needed to keep your building functioning correctly and safely (especially for manufacturing facilities). By investing in quality tools and supplies proactively, you can extend the lifespan of your building and reduce replacement and repair costs.

Ongoing, Proactive Maintenance

Your building needs continued inspections and proactive maintenance to catch minor problems before they grow into more complex and problematic issues. Various experts like electricians, plumbers and HVAC servicers should routinely be brought in to inspect and maintain the lifespan of all core building systems. Better yet, you could hire your own in-house maintenance supervisor who oversees a team of qualified maintenance team members.

How to Budget for Building Maintenance

Having funds set aside for building maintenance is essential for ensuring the functionality and longevity of your property. Fortunately, there are building maintenance cost formulas that can help you to determine what your budget should be.

Current Replacement Value 

According to the Association of Physical Plant Administrators, current replacement value (CRV) is defined as “the amount of money needed to replace an asset at its current market value.” Essentially, it is the total amount you’d expect to spend in the worst-case-scenario to replace your building in its entirety.

Typically, your annual maintenance budget should be 2 to 4 percent of the total CRV. As in, if your current replacement value is $1 million, your budget for property maintenance should be around $20,000 to $40,000 to accommodate general as well as unexpected maintenance needs.

Maintenance Cost per Square Foot

Calculating the maintenance cost per square foot is an effective way to determine how much you’re spending based on the total amount of space at your facility. On average, maintenance cost per square foot comes in between $1.50 and $3. Keep in mind, the cost per square foot varies drastically depending on your industry, location and facility size.

How Using a CMMS Can Help Decrease Building Maintenance Costs

Using a computerized maintenance management system (CMMS) software like Coast can substantially reduce the total cost of maintaining your facility. Consider these helpful use cases of bringing down maintenance costs:

Schedule Preventative Maintenance 

You can schedule preventative maintenance months in advance to have experts inspect your key infrastructure and catch minor issues as they arise. Without a proactive approach to scheduling maintenance, it can be easy to let routine check-ups slip through the cracks, which can result in major issues and costly repairs. Coast keeps your entire maintenance schedule organized.

Simplified Work Order Management

Assign building maintenance tasks as needed to relevant employees, monitor progress and ensure on-time completion of core projects within a simple digital application to: 

• Prevent downtime
• Reduce administrative costs 
• Ensure critical maintenance issues don’t get missed 

Asset Inventory

A CMMS keeps track of all your equipment, parts, tools and supplies in one simplified platform. Rather than buying spare parts unnecessarily or letting parts of your building age without being routinely replaced, a facility management software:

• Eliminates wasteful spending by preventing unnecessary double purchasing of equipment
• Keeps a fully up-to-date log of your inventory and automatically updates when a part is used in a work order
• Notifies you when a part needs to be inspected or replaced

Data-Driven Decision Making

CMMS software pulls real-time data into helpful maintenance reports and dashboards that assist you in identifying trends like recurring issues and opportunities to save money. You can leverage this data to make smarter decisions about where to allocate your resources, prioritize crucial repairs and schedule preventive maintenance.

Regulatory Standards and Safety

There are many general and industry-specific federal and state legislations in place for infrastructure maintenance. Coast helps to ensure compliance standards are met by keeping extensive records of maintenance tasks, drastically reducing the risk of non-compliance penalties and keeping your building safe. 

Get Started With Coast Today

Maintaining your building is essential to keep it fully operational and the occupants safe and comfortable. Don’t continue to let vital maintenance tasks slip through the cracks. 

Sign up for Coast today to schedule critical maintenance, monitor progress, keep your inventory organized and collect helpful maintenance data.