by Carrie Metcalfe on Mar 22, 2025
Article appears under: iRentProperty

Why a Maintenance Budget is Essential for Landlords—And How Much You Should Set Aside

One of the most common questions landlords ask is: How much should I set aside for annual maintenance? The honest answer? It depends.

How Much Should Landlords Budget for Maintenance?

Several factors influence maintenance costs, including the property's age, the number of occupants, and compliance requirements. While there’s no one-size-fits-all answer, a good rule of thumb is to budget around $2,500 per year.

In many cases – including newly built homes -  this amount may be more than needed. However, by rolling unused funds over each year, landlords can build a financial buffer for inevitable larger repairs—such as replacing a heat pump, oven, or hot water cylinder. And if those costs don’t arise? Congratulations! You’ll have a nest egg ready for property improvements that enhance capital value. That’s where Renovate to Rent comes in, helping landlords renovate and modernise thier property to maximise return on investment .

Why Is a Maintenance Budget Important?

A landlord’s financial situation should never be a reason to delay essential repairs. Unfortunately we’ve had clients within our portfolio who haven’t budgeted for essential repairs such as replacing a hot water cylinder, heat pump or woodburner.  When essential heat sources break, they must be repaired to meet healthy home requirements. While a temporary heating solution might be an option, tenants shouldn’t be expected to live in a home that doesn’t meet compliance standards for any longer than necessary.

Similarly, we’ve encountered cases where landlords couldn’t afford to replace a broken oven, leaving tenants without suitable cooking facilities. From a legal standpoint, this could render the property uninhabitable. There are specific requirements for cooking facilities in residential homes. Providing an airfryer instead is not a solution!

Beyond legal obligations, timely maintenance is key to protecting your investment. A blocked gutter may seem minor, but if ignored, it can escalate into serious structural damage—costing far more than routine upkeep. The same applies to annual heat pump servicing, particularly in sulphur rich areas like Rotorua. An annual service helps prolong the lifespan of the unit and avoids costly replacement costs.

Furthermore, a well maintained property is more likely to attract quality tenants who stay long term and maximise the return on your investment.

The Bottom Line

Setting aside a maintenance budget isn’t just good practice; it’s essential for compliance, tenant satisfaction, and long-term asset protection. A well-maintained property retains its value, minimizes costly repairs, and ensures landlords stay on the right side of tenancy law.