Reactive vs Planned Maintenance – Cost Savings to Consider

We’ve posted many times about the need for Planned Maintenance in a Strata or Condo complex. What we want to do in this post is demonstrate, in real terms, how planned maintenance should be an obvious choice. The following example uses a building life span of estimated 80 years, with a focus on roof replacement.

Roof Frequency of Replacement:

Reactive Maintenance – 20 years

Planned Maintenance – 24 years

# of Replacements Required:

Reactive Maintenance – 3 times

Planned Maintenance – 2 times

Total cost @ $225,000 per:

Reactive Maintenance - $675,000

Planned Maintenance - $450,000

But that’s not all we need to consider. With the cost of financing vs saving for those roof replacements, the benefit becomes even more obvious. Financing a new roof (est. $225,000 in a 50 unit complex) over 25 years @ 3.5% interest, will result in a monthly contribution, or increase in fees, of $22.53. Total Cost? $337,881

HOWEVER, if you save towards the inevitable cost of roof replacement, $140,250 is what the Strata contributes over 25 years at the per unit rate of $9.35 per month. When adding compounding interest over the contribution period, the accumulated amount over that time period is $225,193 – the cost of the roof.

Reactive Maintenance:

Replace 3 Times - $675,000

Finance Costs - $591,000

Overall Cost - $1,266,000

Planned Maintenance – Savings of $816,000:

Replace 3 Times - $450,000

Finance Costs - $0

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