An Explainer: Capital Improvement

We expect to gain heavy profits while investing in property. But, to ensure the value of a property does not go down, we have to employ some strategies. According to its age, the worth of a property may decline.  For instance, a buyer would prefer a new building if he finds two good options in the same locality. A 20-year-old building would lose if it competes with a relatively new construction.  This is where capital improvements come into picture. To ensure the value of a property does not diminish over time, you have to keep making improvements. For instance, if you turn the average kitchen into a modular one, it works as a capital improvement. The same is true of changing the tiles in your bathroom. Similar upgrades in other areas of the property would also be seen as part of your capital investment strategy. By doing this, you will be able to maintain the value of the property over a long period of time.

However, keep in mind that maintenance work is not a capital improvement. Keeping the place clean or fixing leaking taps or keeping the electrical wires functioning, for instance, are part of maintenance work and not a capital improvement.