Most property owners have no real number in mind for maintenance until something breaks. That’s the wrong way to plan.
The concise answer: budget roughly 1% of your home’s value annually if it’s newer, and 2-3% if it’s older, according to Dave Pleman, General Manager of Trustie Co., a Southern California general contracting company that works exclusively with property managers, brokers, and investors. But that percentage is only a starting point. On a recent episode of AllView 360, hosts Daniel Gutierrez and Shannon Dempsey sat down with Pleman to break down what actually drives maintenance costs, how to budget for major systems, and why the cheapest option rarely stays the cheapest for long.
Why Has Maintenance Gotten So Much More Expensive?
Most owners assume rising costs come from materials. Labor is the bigger factor. As wages rise, workers’ compensation rises with them, since coverage is calculated as a percentage of payroll. General liability and commercial auto coverage have followed the same trend — commercial auto policies in California have climbed roughly 30% since 2020. Add fuel surcharges, drive time between job sites, and the reality that many trades don’t fully diagnose a problem until they’re on-site, and hourly rates that once seemed high start to make more sense.
This matters for budgeting because it means costs aren’t leveling off. A maintenance plan built on 2015 pricing assumptions will fall short in 2026.
What Should a Realistic Turnover Budget Look Like?
For a standard two-bedroom, two-bath rental, Pleman estimates average turnover costs of $3,000 to $3,500. That figure typically covers paint, minor repairs, updated smoke and CO detectors, small plumbing fixes, and cleaning. Larger homes or longer tenancies push the number higher, both because more wear accumulates and because certain preventative replacements — like decade-old angle stops — make sense to handle proactively rather than waiting for a failure.
The lesson here isn’t the dollar figure itself. It’s that turnover costs scale with two things owners can actually plan for: property size and tenancy length. Budgeting per-unit rather than treating every turnover as a surprise expense makes year-over-year planning far more predictable.
How Do I Budget for Major Systems Like Roofs, HVAC, and Water Heaters?
Big-ticket items don’t fail on a fixed schedule, but they do have a general lifespan worth tracking:
- Roofs typically last around 25 years before deterioration accelerates, according to Pleman, with visible signs of wear starting closer to the 20-year mark.
- HVAC systems fail prematurely most often due to a simple, avoidable cause: dirty filters. A clogged filter forces the system to work harder, raising energy bills and shortening the unit’s lifespan — described in the episode as “trying to breathe through a straw.”
- Water heaters are one of the most common items flagged in home inspections, frequently cited as being at the end of their functional life even in relatively young homes.
None of these fail on a predictable calendar, which is exactly why owners should treat their approximate lifespans as budgeting checkpoints rather than surprises. Setting aside funds as a system approaches its expected end-of-life age — rather than waiting for failure — turns a five-figure emergency into a planned expense.
Quick Reference: Reactive vs. Proactive Maintenance Spending
Does Choosing the Cheapest Contractor Actually Save Money?
Usually not. Daniel shared an example from the episode involving a client who hired the lowest-cost plumber for a building re-pipe. The contractor removed the old drain pipes and never returned to finish the job, leaving behind contaminated water damage that required a specialized remediation company before a new contractor could even begin the repair. The final cost ran two to three times higher than the original — and higher — bid would have been.
As Daniel put it in the episode: “Being cheap will cost you more money.”
This is where budgeting and vendor selection intersect. A maintenance budget only works if the money is spent on contractors who are licensed, insured, and reliable. Unlicensed handymen or the lowest bid from an unfamiliar contractor introduce a level of risk that can erase any short-term savings — and then some.
Building Your Maintenance Budget: Where to Start
For most owners, a workable approach looks like this:
- Calculate 1-3% of your property’s current value as a baseline annual reserve.
- Layer in turnover costs if the property is a rental, using $3,000-3,500 as a starting benchmark for a standard unit.
- Track the approximate age of major systems — roof, HVAC, water heater — and increase reserves as each approaches its expected lifespan.
- Prioritize licensed, insured contractors over the lowest bid, especially for major systems.
None of this eliminates surprises entirely. But it turns most of them into line items instead of emergencies.
Want the full breakdown, including which repairs are worth negotiating during a real estate transaction and the maintenance items owners overlook most often? Listen to the full episode of AllView 360 with Daniel Gutierrez, Shannon Dempsey, and Dave Pleman.
