A reliable CAPEX (capital expenditure) plan for a residential portfolio is the bridge between technical building condition surveys and financial business planning. This article describes the methodology that is standard in TDD and asset mandates, and lists current BKI 2025 rates for the most common components and systems.
CAPEX, OPEX, maintenance reserve – terminology
In the housing industry three cost categories are regularly conflated:
- CAPEX (capital expenditure): value-enhancing investments, capitalised on the balance sheet, depreciated over the useful life. Example: complete reroofing with improved insulation.
- OPEX (operational expenditure): ongoing operating costs, P&L-effective in the year they occur. Example: annual boiler service, cleaning.
- Maintenance reserve (IH): funds set aside for value retention, customarily according to the Peters formula (1.5% of construction cost per year) or market-standard rates (15–25 EUR/m² of residential area/year in NRW).
CAPEX planning is not maintenance reserve planning – it is the investment plan for the next 10–15 years, broken down by measure.
Methodology: from building condition to investment plan
In my mandates I follow a five-stage approach:
Stage 1: component register with condition and remaining useful life
Every significant component and system is recorded – with year of construction (or estimated renewal year), current condition (traffic-light logic) and the structurally or maintenance-driven expected remaining useful life.
Example extract for a multi-family house, built 1972 in Düsseldorf-Bilk (anonymised as OBJ-2026-014-MFH):
| Component | Year of construction / last investment | Condition | Remaining useful life |
|---|---|---|---|
| Roof covering clay tile | 1972 | amber-red | 0–5 years |
| External wall facing brickwork | 1972, uninsulated | amber | 30+ years, GEG-relevant |
| Windows timber double-glazed | 1996 | amber | 10–15 years |
| Gas condensing boiler | 2014 | green | 8–10 years, GEG cut-off 2026 |
| Lift | 1972, modernised 2003 | amber | 8–12 years |
| Drinking water risers | 1972 | amber-red | 0–5 years |
| Electrical installation | 1972, partly renewed 1998 | amber | 5–10 years |
Stage 2: assignment of measures to time clusters
Components with short remaining useful life land in the "1–3 years" cluster (acute), medium ones in "4–7 years", long ones in "8–15 years". Measures with mandatory status (GEG, fire protection) are flagged separately.
Stage 3: quantities and cost assumptions to BKI 2025
Each measure is underpinned with quantities (m², m³, units) and rates from the BKI Construction Cost Information Centre 2025. The following rates are market-standard in NRW (gross including 19% VAT, as of BKI 2025; in Düsseldorf at the upper end):
| Measure | Rate (BKI 2025) |
|---|---|
| Clay-tile roof covering incl. rafter insulation | 220 – 320 EUR/m² roof area |
| WDVS facade 16 cm | 180 – 280 EUR/m² facade area |
| Window replacement triple-glazed timber-aluminium | 850 – 1,350 EUR/unit (medium size) |
| Gas condensing boiler with hydraulic balancing (MFH) | 18,000 – 32,000 EUR (depending on heating load) |
| Air/water heat pump MFH | 35,000 – 70,000 EUR before BAFA subsidy |
| Lift full modernisation | 45,000 – 75,000 EUR/unit |
| Complete drinking water risers (MFH 8 units) | 35,000 – 60,000 EUR |
| Electrical installation renewal (MFH 8 units) | 65,000 – 110,000 EUR |
| Bathroom full refurbishment (existing bath approx. 6 m²) | 12,000 – 22,000 EUR/bathroom |
| Concrete balcony refurbishment with railing | 4,500 – 9,000 EUR/unit |
Important: these rates are ranges. A realistic CAPEX plan works with three scenarios (worst/base/best) and gives an explicit estimation tolerance (e.g. ±20%).
Stage 4: distribution over 10–15 years
Measures are distributed across years taking account of:
- Building-physical sequencing (envelope before plant)
- Tenant impact tolerance (no two modernising measures in the same year)
- Subsidy deadlines (BEG-EM deadlines, iSFP bonus 15 years)
- Liquidity profile of the asset holder
Stage 5: sensitivity analysis
What happens at +20% cost increase? At an earlier heating cut-off? In case of a roof failure? A CAPEX plan without sensitivity is a point statement, not a plan.
Rate samples for Düsseldorf 2026
From current mandates (anonymised, ranges):
- Mid-stock MFH built 1960–1980, uninsulated: CAPEX 10 years 380–620 EUR/m² residential area.
- Refurbished stock 1990s, envelope partly refurbished: CAPEX 10 years 180–320 EUR/m².
- New-build stock from 2010, elaborate: CAPEX 10 years 80–160 EUR/m² (predominantly routine plant work).
- Listed Gruenderzeit old building: CAPEX 10 years often 600–1,100 EUR/m², heavily case-dependent.
ESG component: CRREM and refurbishment path
Since 2023/2024, institutional investors require a statement on Carbon Risk Real Estate Monitor (CRREM) compatibility in TDD and asset management. The question: when does the portfolio fall below the 1.5- or 2-degree path with its current energy profile? This matters because, from the stranding year (typically 2030–2040 for unrefurbished stock), the asset valuation must be questioned.
Consequence for the CAPEX plan: energy measures are treated not only as obligation but as value-retention investment – and placed earlier in the plan accordingly.
Common mistakes in self-prepared CAPEX plans
- Point values instead of ranges. "WDVS 240,000 EUR" – worthless without sensitivity.
- Outdated rates. Construction prices rose 30–45% in 2021–2024. A plan with 2019 rates is unusable.
- Obligations overlooked. GEG obligations on change of ownership, fire protection special-building ordinances, drinking water regulation (legionella testing) are often underestimated.
- Subsidies not factored in. BEG-EM, BAFA and KfW subsidies can reduce net CAPEX by 15–35%.
- VAT jump. For landlords, input tax is recoverable or not depending on tenant type (residential VAT exemption). Mark gross/net statements unambiguously.
Output format of my CAPEX plans
Standard delivery in two formats:
- PDF report (20–40 pages) as a reading version for management, advisory board, bank.
- Excel model (CAPEX plan with timeline, measure list, sensitivities, subsidies), for direct integration into the asset holder's business planning.
Both reference the component register from the TDD/condition survey and are therefore traceable at any time.
Bottom line
A reliable CAPEX plan is not methodologically a feat – but it requires discipline: current rates, ranges, time clusters, sensitivities and ESG compatibility. Anyone working with rates from three years ago or without sensitivity is planning in a structurally wrong way. For institutional mandates the combination of TDD plus CAPEX plan in one consistent piece is standard – half-measures are rightly rejected by the investment committee. And it stands or falls with the data basis: without a sound building survey and groundwork assessment, costs and risks in the stock cannot be estimated sensibly.
Related articles:
- Technical Due Diligence: Contents, Depth, Report Structure
- GEG 2024/2026: Refurbishment Obligations and Exceptions
- iSFP 2026: Refurbishment Roadmap and BAFA Bonus
Next step: Advice on CAPEX planning for asset holders – methodology, example reports and fee models in an initial discussion.
Next step
Would you like this topic assessed for your property in concrete terms? I offer a free initial consultation — fee ranges, scope and available subsidies discussed openly.