Introduction
We all want to increase the value of our properties while ensuring a good and fair living experience for our tenants. To achieve this, maintenance must be carried out professionally and in a timely manner. However, how much should we invest in maintenance? How do we find the right balance between improving our properties and maintaining profitability? Is there a benchmark for the ideal maintenance cost?
At Dinvest, we recognize that this is one of the most important aspects of property management. We continuously assess the right balance using our reporting system, which monitors approximately 150 buildings in the Basel area. Through data analysis, we have identified key maintenance cost benchmarks based on property age:
- New buildings (up to 5 years old): Maintenance costs range between 2% - 5% of rent.
- Buildings aged 5-10 years: Maintenance costs rise to 4% - 10%.
- Buildings aged 10-20 years: Maintenance costs range from 8% - 12%.
- Older buildings: Maintenance costs range between 10% - 18%.
While these benchmarks provide useful insights, they are just statistics. The real key to success lies in applying the right principles for optimizing and controlling maintenance costs.
Principles for Optimization and Cost Control
Creating a Budget – Setting clear expectations between property managers and owners helps prevent unexpected expenses and ensures proper allocation of resources. Preparing a budget at the beginning of the year is a good practice that sets expectations and provides managers with a guideline and target.
Transparency – Real-time communication and online access through the owner portal to property accounting and monthly reporting ensure there are no surprises. If costs exceed expectations, adjustments can be made to the budget plan.
Proper Property Data Classification Using AI Screening Tools – By implementing AI-driven automation, we ensure accurate tracking of warranty periods, insurance claims, and cost allocation between tenants and owners, leading to optimized maintenance management and reduced costs. Enhanced property data classification can only be achieved when invoice processing and data entry are handled by AI screening tools rather than manual typing. Many companies still manually input invoices, a costly and time-consuming process that limits effective property data classification.
Leveraging a Trusted Vendor Network – Choosing the right service provider is crucial. Collaborating with reliable service providers at negotiated discounted rates without compromising quality ensures cost efficiency. We monitor our vendor network to ensure our partners meet the highest standards of work at a reasonable price.
Data-Driven Investment Decisions – Utilizing historical maintenance data and predictive analytics helps make informed choices about property improvements and repairs. For example, if recurring mold issues arise, property managers must decide whether to invest in a permanent solution or continue making occasional repairs. Properly classified past data enables educated decision-making, which is why we prioritize data collection and classification.
How Dinvest Does It
At Dinvest, we integrate these principles into our property management approach to maximize efficiency and cost-effectiveness. By combining strategic budgeting, transparent communication, and cutting-edge data analysis, we ensure that our properties remain well-maintained while optimizing costs. Our goal is to provide superior service, enhance property value, and maintain long-term profitability for property owners.
Are you looking for an expert team to optimize your property’s maintenance strategy? Contact Dinvest today to learn how we can help you achieve the perfect balance between investment and profitability.