Building Maintenance Costs: Key Formulas to Master Your Budget

A building is a living asset. You can’t just buy it, lock it up and expect it to generate value for decades. Facilities require everything from routine inspections to critical infrastructure overhauls — and all of it comes with a price tag.

There’s just one problem: Most facility management teams handle their building maintenance costs reactively, not proactively. They wait for a boiler to fail or a pipe to burst, then scramble to find the funds to fix it. Without a preventive maintenance plan in place, a missed inspection can quickly become a recipe for disaster.

So, how do you move from a reactive, guesswork-based approach to a strategic, data-driven one? 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 management 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. Your power is back on, and your staff is able to get to work. 

Hidden Costs of Reactive Maintenance

Now, let’s look at the same scenario a bit differently. This reactive maintenance approach feels cost-effective at first, but it comes at a steep price:

• Sky-high emergency repair costs: Calling in a last-minute repair crew often costs more than a scheduled maintenance visit.
• Extended downtime: Every hour a critical asset is down, you’re losing revenue, productivity and customer trust.
• Premature asset replacement: Skipping a simple, scheduled repair could lead to the complete failure of an expensive piece of equipment, forcing you to buy a new one prematurely.
• Excessive energy consumption: Poorly maintained equipment, such as an HVAC system with dirty filters or a generator needing lubrication, runs inefficiently. This inefficiency directly increases your utility and energy bills.
• Safety and compliance penalties: When maintenance is reactive, safety checks often get skipped. This increases the risk of health and safety incidents and can lead to expensive regulatory fines or reputational damage.

The key to escaping this cycle is to move beyond the mindset of “fixing what’s broken” and start planning for breakdowns. A simple, accurate budget is your first line of defense.

Most Common Building Maintenance Budget Formulas

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 footage varies drastically depending on your industry, location and facility size. As such, premium properties can see costs between $2.50 to $8.50 per square foot.

Total Cost of Ownership

While the total CRV helps you set an annual budget, the total cost of ownership (TCO) is a gold-standard metric for deciding whether to repair an old asset or buy a new one. It provides a full, lifecycle view of the asset’s cost, from its first day to its disposal.

The TCO formula is:

• Initial cost: The original purchase price of the asset
• Maintenance costs: All expenses related to servicing, repairing, and part replacement over the asset’s life
• Operating costs: The cost of energy, fuel, and supplies needed to run the asset
• Residual value: The estimated resale or salvage value of the asset at the end of its useful life

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 cost of maintenance at these facilities varies greatly depending on the size and property value of the building, regulatory standards in your sector, age of the facility, amount of foot traffic and geographic location, to name a few.

Commercial Retail/Office Building

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

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

Common types of maintenance activities involved:

• 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 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 real estate 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

Building Maintenance Costs: How to Budget to Save Time & Money

As you can see, there are common building maintenance services that almost every type of building requires. Think 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 service providers to monitor and maintain the infrastructure. 
• Equipment, supplies and tools: In order for your janitor to sweep, they will need a broom. Property 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 services 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.

Key Performance Indicators for Tracking Maintenance Expenses

To move beyond simply tracking expenditures, you must measure your maintenance program’s financial performance. These two key performance indicators (KPIs) are crucial for any facility manager focused on reducing building maintenance costs:

1. Maintenance Cost Per Asset:

• What it measures: The average amount spent on maintaining a single piece of equipment (e.g., an HVAC unit or a boiler) over a specific time period.
• Formula: Total Annual Maintenance Cost / Number of Assets
• Actionable insight: This KPI immediately identifies “budget killer” assets that are repeatedly costing more to maintain than they are worth, signaling they are candidates for replacement.

2. Planned Maintenance Percentage (PMP):

• What it measures: The ratio of maintenance hours spent on proactive tasks versus reactive, unplanned tasks.
• Formula: Planned Maintenance Hours / Total Maintenance Hours x 100
• Actionable Insight: A higher PMP (aim for 80 percent or above) indicates a mature, cost-saving maintenance strategy. Every increase in planned maintenance percentage should correspond to a decrease in costly emergency breakdowns and overtime.

How 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 to ensure facility-maintenance cost savings:

Schedule Preventive Maintenance 

Using a preventive maintenance software, you can schedule tasks months in advance to inspect 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 Management & Parts 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 CMMS:

• 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 & 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

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

Sign up for Coast today to improve your preventive maintenance program, monitor progress, keep your inventory organized and collect helpful maintenance data.