Management Company: Annual Maintenance VS Capital Improvements

A Management Company …

understand how to guide owners through the question of annual maintenance versus capital improvements.

There have been many questions over the years and much confusion over this subject. Many investors will want to itemize as much of the costs of their properties as maintenance versus labeling these costs as capital improvements.

Property_Maintenance_1-300x253Management Company knows that Capital improvements:

are the addition of a permanent structural improvement or the restoration of some aspect of a property that will either enhance the property’s overall value or increases its useful life. Although the scale of the capital improvement can vary, capital improvements can be made by both individual homeowners and large-scale property owners.

This definition can leave this question wide open for debate, but a wise management company helps owners make sound decisions…

Will this addition or restoration of a permanent improvement enhance the value or just maintain the value. Will it increase the useful life? Of course if you replaced a heating system you would be increasing the useful life but you are also just maintaining the property in keeping it in a good operating condition.

You will need to speak with your owner accountant or CPA and make a decision whether you will identify improvements as maintenance or capital improvements. There may be tax advantages or not as how you label your improvements.

Call Performance Property Management for all your property management needs at 303-351-8005.

Remember www.PPMRentsDenver.com

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Author:

Jerry Minney, Business Development Manager

Performance Property Management; a property management company