Development of a Long-Term Repair Allowance Estimation Model for Apartments Based on Multiple Regression Analysis in Korea

Abstract

Buildings aged 20 years or older account for 63.34% of all edifices in Korea. To ensure sustainable construction, apartment managers must plan and allocate financial resources to maintain communal facilities. However, on the one hand, long-term repair allowances (LTRAs) can be underestimated relative to actual repair costs; consequently, apartments can rapidly deteriorate. On the other hand, the long-term allowance may exceed the actual repair expenditure, thus, wasting resources. Existing estimation methods do not consider the apartment management degree, equipment condition, time value, or the extent of building deterioration. Based on multiple regression, this study developed a repair budget estimation model that considers the influencing factors that include the main characteristics of apartments and the time value, thereby allowing apartment managers to estimate the appropriate long-term repair expenses. In the conducted experiments, the root mean square and mean absolute percentage errors of the estimation model were USD 144,587.38 and 25.6%, respectively. Further, ANOVA results showed a difference between the actual and estimated total long-term repair costs. The resulting model should support apartment managers in establishing reliable maintenance budgets and effectively prevent the functional degradation of buildings.