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Question
Why does the 1% rule for annual maintenance budgeting exist, and what are its limitations?
1
It is a widely-used rule of thumb averaging annual maintenance costs at 1% of property value per year, providing a planning baseline; its limitation is that older or more complex properties may significantly exceed this, while newer builds may be lower in early years
2
It is a legal requirement in most jurisdictions, set at 1% to ensure landlords can fund statutory repairs; its limitation is that it doesn't apply to leasehold properties
3
It is a tax deduction cap set by HMRC at 1% of property value annually for revenue maintenance costs
4
It is the maximum amount a landlord can charge tenants for maintenance in regulated tenancies
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