How Your Rusty Roof Can Make You Money

In this economy, roof repairs need to be cost effective. Restoring your rusty roof can make you money in several ways.

1. By avoiding having to pay for a re-roof later. To find out what this is worth, plug into a financial calculator the cost of a re-roof, interest rate, and years till re-roof. Then calculate the Net Present Value. This is how much a re-roof in the future will cost in today's dollars. The difference between this and the cost of a restoration is your savings.

2. By saving energy. A restoration will save you 15 - 30% off on your air conditioning bills. Take this monthly savings, annualize it, and put a cap rate on it. This is the worth in current dollars of that income stream.

3. By saving taxes. A restoration is considered maintenance and can be depreciated immediately. A re-roof is not, and must be depreciated over 39 years.

4. In direct costs. Your leaky roof is probably costing you something now. Patching repairs, and damage to your operations.

Example: 30,000 square foot metal roof has 5 years of life left, HVAC bills run $2000/month, 35% tax bracket, $5000/year current roof patching costs, $10,000 damages per year due to materials getting wet in the building.

1. Re-Roof Cost (30,000 sq ft @ $6/sq ft): $180,000
NPV (5 yrs @ 5%): $140,257
Less Restoration Cost (30,000 sq ft @ 2/sq ft): $ 60,000
Savings: $ 80,257*

2. ($2,000/mo @ 22.5% savings) x 12 mos/yr: $ 5,300
10% cap rate values cash stream: $ 54,000*

3. Tax write off 35% of $60,000:$ 21,000*

4. $5,000/yr for 5 years: $ 25,000
$10,000/yr for 5 years:$ 50,000
Total for 5 years: $ 70,000
NPV (5 yrs @ 5%):$ 54,000*

Total of * (current $): $209,257

So if you can find $60,000 to restore your rusty roof, your rusty roof can make you over $200,000.