How do I set an annual maintenance budget per unit for my rentals?
Take your actual repairs and maintenance from the last two or three years, divide by unit-years to get a per-unit figure, then adjust for the age of each building and anything you know is coming. Keep this ordinary budget separate from capital reserves for big replacements like roofs and boilers. Your own books are a better guide than a rule of thumb, because older buildings and long tenancies cost more.
Two buckets, not one
| Bucket | What goes in it | How to plan |
|---|---|---|
| Repairs and maintenance | Service calls, filters, small fixes, pest control, gutter cleaning, turn costs | A yearly per-unit budget |
| Capital reserves | Roof, boiler, siding, parking lot, major systems | A monthly set-aside for replacement |
IRS Publication 527 explains that repair costs can be deducted if you are not required to capitalize them, while improvements must be capitalized. Mixing the two buckets in your plan hides both. For the reserve side, see capital expenditure reserves per unit.
Compute the per-unit figure
- Add up the repairs and maintenance expense for each of the last two or three years, excluding capital items.
- Count unit-years: the number of units you held, summed over those years.
- Divide expense by unit-years.
- Compare buildings; the newest and oldest rarely match.
Example a made-up owner has a 6-unit building and a 4-unit building. Last year, repairs and maintenance came to $7,200 on the 6-unit and $6,800 on the 4-unit. That is $1,200 per unit on the 6-unit and $1,700 per unit on the 4-unit, because the 4-unit is 60 years old. Combined it is $14,000 across 10 units, an average of $1,400 per unit, but the owner budgets each building by its own number.
Check: $7,200 divided by 6 is $1,200, $6,800 divided by 4 is $1,700, and $14,000 divided by 10 is $1,400.
Adjust for what you know
- Add for buildings with older plumbing, wiring or appliances.
- Add for units with long-term tenants who will move out soon.
- Subtract for work done last year that will not repeat.
- Add for known recurring services: pest, gutters, duct cleaning, filters.
- Add a cushion of about one extra service call per unit as your own judgment.
Track it monthly, not once a year
Compare actual spending with a twelfth of the budget each month. A single large month is normal; a trend of three over-budget months in a row is a signal to look at the vendors or the building. Do not spread a one-time event across the year just to make a month look even; record it when it happens and note it in the margin. If a building runs over budget for the whole year, look at the three biggest invoices first, because a few large jobs usually explain most of the gap. Review it with your month-end close; see the month-end close checklist.
Questions to ask when you review the budget each year
- Which unit or vendor cost the most, and why?
- Which repairs came back within 90 days?
- What did tenants report late, and what did that cost?
- Which appliances are past a normal life and likely to fail next?
- Is a recurring repair now bigger than a replacement would cost?
Write the answers in two or three lines. Next year's budget starts from them, and you will see whether your changes helped.
How DoorKeeping handles it
Ask your Claude or ChatGPT, connected to DoorKeeping, to open a work order, send the vendor a job link and read the bill when it arrives. Ask for repairs and maintenance by property or unit for any period and compare it with your budget, since each bill is coded to an expense account in the books. Anything that involves money or a legal step waits for your one-tap approval, and DoorKeeping costs $2 per unit per month with every feature included.
Sources
- IRS Publication 527, Residential Rental Property, read Oct 30, 2026
Questions
- Is there a standard percent of rent for maintenance?
- Rules of thumb exist, but they hide differences in age and market. Your own history is better.
- Does the maintenance budget include vacancy?
- No. Vacancy is lost rent, not maintenance expense. Track it separately.
- What about turnover costs?
- Include routine turn costs here, and large replacements in capital reserves.