Model a home maintenance reserve

Short answer #

An annual percentage is a scenario assumption, not a forecast. Add known works separately and avoid double counting between reserve, service charges and specific renovations.

Important variables #

• Price, rent and holding period
• Rate, principal and remaining balance
• Buying, maintenance and selling cost
• Appreciation and alternative return

Worked example #

1% of a €400,000 building value is €4,000 yearly. A known heating replacement must not also be fully buried in the same allowance.

Break-even: What changes the result? #

Test the main driver as a cautious, central and optimistic range. Also check whether the ranking reverses at a crossover or remains robust across the range.

Common mistakes #

• Comparing mortgage payment directly with rent
• Omitting transaction cost or remaining debt
• Treating appreciation as guaranteed

Sources & assumptions

• Deutsche Bundesbank — Bank Lending Survey Germany, July 2026 (2026-08-17)
• RATIOXA — Methodology and formulas (2026-08-17)