Took me a few tries to realize everyone is talking about 1% ANNUALLY, divide by 12, and there's the monthly... I suppose that makes sense...
The 3% definitely includes upgrades, reflooring, siding, new roof, etc... a new roof can be $10k+ easily, so at $500/mo it takes two years to save up for a roof...
If I was ignoring upgrades, I think 1% is good for maintenance....