How can a building owner or manager budget ahead of time for such a large expenditure like roof replacement? Conducting an inventory and analysis of the roof's present condition is extremely helpful in the early phases of planning. Short of this step, however, managers still can perform some general planning and budgeting.
Managers should use their experience to establish a projected average service life of roofs. Several factors influence a roof's service life — the quality of the design, installation, products, and maintenance, as well as roof use, abuse, and weather.
For example, in a building with 1 million square feet of roofing and a projected performance life of 20 years, a manager might consider budgeting to replace 1/20 of the roof — 5 percent — or 50,000 square feet per year.
If the average cost of roof replacement is $7 per square foot, a manager might budget $350,000 for roof replacement each year. If the expected service life of a roof is 10 years, a manager then would budget $700,000 annually for replacement.
Obviously, this approach involves many assumptions. For example, the entire roof might need replacement at one time if the entire system is the same age and condition. But for general planning, budgeting in this fashion is a start.
This approach is usually more appropriate for a large number of buildings with roofs of different types and ages if the manager has not completed a roof-system inventory.
Every financial model makes several assumptions. Projecting a roof's service life, future maintenance and repair costs, and costs resulting from leak damage, downtime, and lost business is an educated guess, at best. Predicting the inflation rate and the time value of money also can vary greatly, depending on the source of the information.
The roof replacement-maintenance debate encompasses many factors and areas of a facility. But in the end, a manager's ability to cost-justify the project and make a sound decision comes down to being able to analyze accurate information and understand the risks and costs associated with each option.
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