Budgeting for Repairs: How to Allocate Funds for Commercial Building Maintenance

For property owners and managers, a crucial aspect of keeping commercial buildings in top shape is regular maintenance. And, while it isn’t the most exciting topic, budgeting for maintenance and repairs is key to safeguard your investment, keeping it protected and healthy for years to come.

In this blog, we explore critical components to effective budgeting, emergency preparedness, and other considerations that are important for the success of commercial building management.

Establishing a Dedicated Budget

To keep your commercial building running smoothly, you’ll need a dedicated budget for repairs and maintenance. When estimating annual repair and maintenance costs, you can consider the building’s age and when major components may need to be repaired or replaced - HVAC systems, roofing, or elevators as some examples.

With seasonal weather on its way, it is also important to factor in the building’s location. Is this area prone to damage from hail, strong wind, or other weather events? Understanding specific weather risks associated with the building’s location helps property owners and managers to anticipate potential damage, factoring those expenses into the budget. This helps safeguard buildings against weather-related risks.

Something else to add to the budget: historical repair costs and the cost of inflation. By seeing what you've spent before, you can better predict what you'll need to spend in the future. This includes identifying areas that may require more attention due to recurring issues. Considering inflation, of course, can also aid in forecasting future expenses more accurately.

Including preventive maintenance programs in your budget is also important for several reasons. It can help identify and address any potential issues before they become expensive problems, improve energy efficiency, prolongs the lifespan of important building components, and keeps occupants safe and comfortable.

Preparing for Emergencies

No matter how well you plan, emergencies happen. That's why it's smart to have a separate emergency repair fund ready to cover expenses of the unexpected - water leaks, electrical failures, undetected structural issues, natural disasters, and other urgent situations.

Having a response plan in place, in addition to the fund set aside, is critical for commercial property management. A proper emergency response plan should outline communication procedures, designate emergency contacts, clearly state roles and responsibilities, and establish evacuation procedures when necessary.

Property owners should also identify reliable local contractors and other service providers for emergency repairs and add this information to their response plan. Clear procedures and reliable contractors on speed dial can make all the difference when emergencies require quick action.

Other General Considerations

Not budgeting for maintenance and repairs might seem like saving money in the short term, but it will cost you in the long term. Neglecting your building can lead to more frequent breakdowns, unhappy tenants, and even safety or health hazards. Taking the time to budget properly and plan for emergencies can extend the life of your building, keep any tenants safe, and protect business operations.

As part of this process, regularly check in on your building's age and condition. Older buildings might need extra maintenance, while newer ones might be more low-maintenance. Either way, it's essential to regularly review and adjust your budget to keep up with changing needs and unexpected surprises.

Budgeting for maintenance and repairs might not be the most glamorous part of owning or managing commercial property, but it is absolutely essential. By planning ahead, budgeting smartly, and being prepared for emergencies, you can keep your building in quality shape, occupants safe and healthy, and keep business operations smooth. Effective budgeting and planning are indispensable for successful commercial building maintenance and management.