Preventive Maintenance vs. Reactive Maintenance: Costs, ROI & Best Practices
by Logan Anderson
Director, Strategy & Growth
Updated 25 August 2025
Key Takeaways
- Reactive maintenance costs 25–30% more due to 2–3× emergency labor, 50–100% after-hours uplifts, and 25–50% rush parts, plus downtime and abatement exposure.
- Preventive maintenance (PM) typically cuts OPEX 12–18% and can deliver ~400% ROI via fewer failures, energy savings, and extended asset life.
- Reliability improves: Mean Time Between Failures up 50–75%; failures down 40–60%; Mean Time To Repair down 30–50% as programs mature.
- Documented preventive maintenance supports compliance and can lower insurance premiums 5–15%.
- An updated tech stack reduces admin 40–60% and lifts schedule adherence with work-order automation and mobile workflows.
Overview
Commercial property maintenance falls into two main buckets: reactive maintenance (fix it after failure) and preventive maintenance (service it before failure). For landlords and property managers, the choice between the two affects net operating income (NOI), tenant satisfaction, compliance risk, and asset value.
Industry research shows reactive programs cost 25–30% more. Emergency labor, downtime, and rush-part premiums drive this gap.
Preventive maintenance programs on the other hand typically cut operating expenses (OPEX) by 12–18% and can deliver up to 4× ROI through fewer failures, energy efficiency, and longer asset life.
If your goal is consistent service, controlled spend, and audit-ready documentation, the shift to more preventive maintenance is clear.
For a much boarder view of overall property operations and maintenance, explore our Ultimate Guide.
What is Preventive Maintenance?
Preventive maintenance in commercial property programs
Preventive maintenance (PM) is scheduled service that prevents failures, optimises energy performance, and extends equipment life. The BOMA 360 Program criteria frame PM as a documented, systematic program with defined inspections, corrective actions, and frequencies across building systems.
The trade-off is clear: pay a predictable cost up front. In return, you cut emergencies, energy waste, and compliance risk.
Examples and standard frequencies in property maintenance
Cadence varies by system and usage. Here are some common commercial baselines aligned to standards and codes.
- HVAC: daily visual checks; weekly walk-throughs; monthly filters; quarterly coils/refrigerant; annual deep clean and calibration.
- Elevators: scheduled inspections, lubrication, door maintenance, safety tests, and annual regulatory exams.
- Fire safety: monthly extinguisher/alarm checks, semi-annual kitchen hood suppression service, annual full-system inspections.
- Roofing: at least twice per year (spring and fall) for drains, penetrations, seals, and membrane integrity.
If you're starting to build out your preventive maintenance program, your might find this useful: Preventive Maintenance Program: 5-Step Guide for Property Portfolios.
Maintenance Planning & Execution: Strategies That Drive Value
Reactive maintenance (run-to-failure) addresses issues after they occur: leaks, unplanned HVAC outages, elevator entrapments. It can look cheaper up front, but emergency premiums, downtime, and abatement risk compound quickly.
When reactive maintenance is unavoidable
Some events demand an immediate response: severe weather damage, grid failures, tenant-caused damage, manufacturing defects, water intrusion, or cascading faults. The goal is to manage these events with strong SLAs, prequalified vendors, and post-incident root-cause analysis that feeds your preventive maintenance plan.
Sidebar — When reactive is necessary
- External events: storms, utility disruptions.
- Life safety: fire alarm activations, elevator entrapments.
- Tenant impacts: accidental damage, immediate habitability issues.
There will always be unavoidable circumstances. When faced with these, use triage, prioritise safety and essential services. Then update future maintenance schedules based on findings.
If your interested in how best to manage emergencies you can find more information on this here: Emergency Maintenance: A Guide for Property Managers.
Cost implications of preventive vs. reactive maintenance
Five-year total cost of ownership comparison
Scenario: 100,000 sq ft office; five-year horizon. Ranges reflect industry benchmarks and vary by market, tenancy, and equipment mix.
| Cost component | Preventive (5-year) | Reactive (5-year) | Notes |
|---|---|---|---|
| Scheduled service | Contracted; 15–25% below ad hoc | Higher per-call rates | Volume efficiencies and predictability |
| Emergency premiums | Lower frequency | 2–3× labor; 50–100% after-hours | Plus 25–50% rush parts |
| Energy | 10–20% lower | Baseline or worse | Performance tuning yields savings |
| Asset life/replacement | Life +25–40%; capex deferral | Earlier replacement | Major systems like HVAC. |
| Downtime/abatement | Planned windows minimize impact | Higher disruption; abatement exposure | Elevators often trigger abatements. |
| Insurance premiums | Potential 5–15% reduction | No reduction; higher claims risk | Documented PM improves risk profile. |
| Admin/overhead | 40–60% lower with automation | Manual triage and paperwork | CMMS and mobile workflows. |
Five-year modelling for a 100,000 sq ft office typically shows annual PM budgets of $250k–$400k. Total savings of $500k–$750k accrue via fewer emergencies, energy gains, and deferred replacements.
Beyond ROI of preventive maintenance for landlords and property managers
Whilst ROI is important, preventive maintenance drives measurable performance in a number of areas. These are
- Reliability: failures down 40–60%; MTBF up 50–75%; MTTR down 30–50% as programs mature.
- Energy: 10–20% lower usage through tuned systems and documented PM. DOE FEMP.
- Tenant outcomes: satisfaction up 15–25%, supporting renewals and rental stability.
Predictive maintenance leverages sensors, building automation system (BAS) data, and condition monitoring. Using these teams can start to service equipment based on actual condition, not just time. The downstream impact is that portfolios report fewer surprises and 20–30% extra optimisation on targeted assets through better timing and parts planning.
Reliability metrics at a glance
| Metric | Definition | Typical PM impact |
|---|---|---|
| MTBF | Mean Time Between Failures | +50% to +75% |
| MTTR | Mean Time To Repair | -30% to -50% |
| Planned:Emergency | Work mix ratio | ≥ 70:30 after stabilisation |
Best practices to shift your property maintenance to preventive
A 180-day implementation roadmap
Make the shift in six practical steps:
- Asset inventory and condition assessment (days 1–60): build an asset register with make/model, install dates, criticality, and condition notes.
- CMMS selection and configuration (days 60–120): stand up asset records, locations, and PM libraries; connect tenant request intake and approvals.
- Schedules and checklists (days 90–120): load frequencies aligned with ASHRAE 180 and OEM guidance; attach standard operating procedures.
- Vendor onboarding (days 90–140): prequalify; set SLAs; share scopes and mobile workflows; define compliance documentation standards.
- Training and go-live (days 120–150): train staff and vendors on mobile work orders, escalation, and photo documentation.
- Stabilise and optimise (days 150–180): track KPIs; tune schedules; add predictive sensors where high impact.
Compliance and documentation
Standards vary depending on the systems your property has. This makes it important investigate the public standards that align with specific systems. Here are a couple examples
- HVAC: ASHRAE Standard 180 minimum maintenance requirements; log filters, coils, and calibration tasks.
- Fire safety: NFPA codes for monthly checks, semi-annual suppression service, and annual full inspections.
- Elevators: code-driven inspection/testing cadence with certified technicians; keep certificates and corrective action logs.
- BOMA: leverage the BOMA 360 Program criteria to systematise policies and procedures.
The importance of compliance documentation cant be stressed enough. It even leads to direct expense reductions as insurers often recognise well-documented PM with premium reductions.
CMMS and automation workflows
Here are some core automation opportunities to maximise the effectiveness of a preventive maintenance plan:
- Work order automation: generate, assign, notify, and escalate based on asset criticality and SLA tiers.
- Mobile-first execution: technicians complete checklists, attach photos, and close out in the field.
- Asset lifecycle tracking: link costs and failures to assets to support repair/replace decisions.
- Vendor SLAs: define response/resolution windows (e.g., 2–4 hours for critical), track compliance, tie payment to performance.
- Reporting: planned-to-emergency ratio, completion rates, MTBF/MTTR, OPEX/sq ft, and energy intensity — reviewed monthly.
An emergency triage flow
- Safety first: isolate hazards; communicate immediate instructions.
- Triage: classify by safety, business impact, tenant impact, cost escalation.
- Dispatch: use prequalified 24/7 vendors with SLAs (2–4 hours for critical systems).
- Communicate: issue status updates and realistic ETAs to tenants (see response playbook).
- Control spend: apply pre-approval limits (e.g., $5k–$15k) and capture documentation for claims.
- Recover and learn: root-cause analysis; update PM schedules; document for compliance and insurance.
Clear SLAs keep responses timely and auditable. Structured abatements may apply for prolonged outages; elevator clauses are common in leases.
Tenant communication that builds trust
Proactive communication protects satisfaction and renewals. Publish your PM calendar, notify well ahead of planned outages, and send brief status updates during emergencies. Tie messages to outcomes: comfort, safety, energy efficiency, and uptime. Measure tenant sentiment regularly and track service correlations to spot improvement opportunities.
Preventive maintenance kickoff checklist
- Establish goals: OPEX reduction, planned-to-emergency ratio, MTBF/MTTR, tenant satisfaction.
- Build asset register with criticality scoring and warranty data.
- Map frequencies to compliant standards and set seasonal windows.
- Prequalify vendors; define SLAs; align on documentation and close-out standards.
- Automate schedules and routing; enable mobile execution with photo logs.
- Publish a maintenance calendar to tenants; include outage windows.
- Report monthly; review quarterly; tune schedules and SLAs.
- Plan for predictive pilots on high-value systems (e.g., chillers, elevators).
As a starting point you can customise and download several types of maintenance checklists here: Property Maintenance Checklists.
Final thoughts
The business case is clear: shift emergency fixes to scheduled upkeep to protect NOI. Preventive programs reduce OPEX, mitigate risk, and improve tenant satisfaction. With the right technology, they are also achievable at scale. If you want help operationalising schedules, automating work orders, generating vendor SLAs, and documenting compliance, here are some useful resources.
About the Author
Logan Anderson
Director, Strategy & Growth
Logan combines strategic operational expertise with deep knowledge of commercial real estate (CRE) to drive meaningful growth across the industry. His focus is on connecting property businesses with enterprise applications enhancing compliance, financial operations, property management, stakeholder relationships. His goal: help real estate businesses scale smarter in a digital-first world.
