How to Build a Property Budget That Actually Works (Thanks, Data!)

Budget season doesn’t have to feel like doomscrolling through spreadsheets. If you’re a property manager who dreads creating budgets because it feels like a guessing game—or worse, a wish list—you’re not alone. But the good news? There’s a better way, and it starts with using the data you already have.

Take a recent gem from the news cycle: El Presidente got grumpy (again) and decided to flex his policy muscles by slapping tariffs on basically everything. Because nothing says “economic stability” like a political tantrum with international consequences.

The fallout? Rising costs aren’t just hitting builders and developers, they’re trickling down to the everyday stuff we use in property management. ALREADY. HVAC repairs? More expensive. That bulk order of door handles you thought was a steal? Not anymore. Renovations, turnovers, new construction—you name it, prices are creeping up. If your budget doesn’t have room for that kind of drama, you’re setting yourself up for a world of headaches.

So, let’s walk through a practical, step-by-step guide to creating a solid property budget based on reality—not just hope. Because when your budget is backed by data, you make smarter financial decisions, avoid overspending, and, yes, actually sleep at night.

Step 1: Start with Historical Spending

Look at the past 12–24 months of actual expenses. Not the budgeted ones—the real ones.

Focus on:

• Utilities (water, gas, electric)
• Maintenance and repairs
• Turnover costs
• Staffing and contractor invoices
• Marketing and leasing expenses

Don’t just average the numbers. Look for patterns or spikes. I’ve made this mistake before, being aware of seasonal utility changes is one thing, but digging into why maintenance costs keep jumping in December is another. Did something consistently break? Were vendors overbooked and overcharging? These aren’t coincidences—they’re clues.

👉 Pro tip: If your financials are a hot mess, start with reports from your property management software or bank statements to build a clean baseline.

Step 2: Factor in Vacancy Trends

Vacancy = lost income, plain and simple. Look at your occupancy rates and the average number of vacant days per unit over the past year.

Ask yourself:

• Did a specific time of year hit harder?
• Are you budgeting realistic lease-up timelines?
• How often do you use concessions to get leases signed?

Use that data to estimate your true rental income, not just “100% leased” dreams.

👉 Pro tip: When posting rental rates, consider leasing velocity and demand. Most modern software will help here (though, yeah, that software has been in hot water lately for some not-so-legal rent collusion). If you’re not using software, do some competitor surveying and keep detailed notes. Seriously—keep documentation. I’m not a lawyer, but you want your rate changes to stand up under Fair Housing scrutiny. Rates go up in the summer and drop in the winter in most markets, that is normal. Just make sure you can explain why.

Step 3: Don’t Lowball Maintenance Costs

This one bites people every time. Underestimating maintenance is how budgets spiral.

Use historical data, but also think ahead:

• Is the roof on its last leg?
• Is that new construction from 2015, and now the appliances are aging out like clockwork thanks to corporations and their planned obsolescence?
• Are you due for seasonal deep cleans or landscaping upgrades?

Get ahead of these costs now, not later. Surprise expenses shouldn’t be so surprising.

Step 4: Leave Room for the Unexpected

Even the best data won’t predict every “uh-oh” moment (like vendor price hikes… or the time a resident rushed out for a flight, left the water running on the 4th floor, and you didn’t find out until a 2^nd-floor resident called you about their unexpected indoor pool because the 3rd floor was vacant and turned and ready to be moved into next week… no, I swear I am not traumatized).

Budget a contingency line item, typically 3–5% of your total operating expenses for those “what ifs.”

Step 5: Review & Adjust Regularly

A budget isn’t a tattoo. Revisit it quarterly. Compare your actuals to what you planned, and course-correct where needed. That’s how you stay agile and avoid the dreaded “we went over budget again” conversation at year-end.

Why Data-Driven Budgets Work

When you lean on data instead of vibes, you're better equipped to:

• Justify decisions to owners and investors
• Spot cost-saving opportunities
• Prevent shortfalls that derail operations

In short: you manage with confidence, not crossed fingers.

Your Turn: Let’s Talk Budgeting Woes

What’s been your biggest challenge when it comes to building or sticking to a property budget? Drop a comment or shoot me a DM—I’d love to hear what’s worked for you (and what’s still a hot mess).

Want more practical takes like this?
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Until next time, keep it professional-ish.
— Miguel