If you work with rental or condo properties, it's essential to understand the difference between maintenance and capital improvements. It's also crucial to budget for and complete both on a regular basis. Here's a bit about repairs and capital improvements, and how best to go about each.
Routine and preventative maintenance
Routine and preventative maintenance are critical when it comes to maintaining the property's value. If you don't deal with these routine items, they're liable to cost you a lot of money in the long run when major repairs come due. Maintenance means any action that restores the property to its expected functional state. These are all the things you do to keep the property at a basic operational level, such as:
- Replacing light bulbs
- Repairing a leaky roof
- Replacing a pool filter
- Mowing the grass
- Painting hallways
- Fixing plumbing
It's important to adequately budget for maintenance every year. In other words, you'll need operating funds. You'll want to both focus on routine maintenance and preventative maintenance-replacing and fixing items before they're no longer usable. Knowing the "useful life" of each item on your property is good for accurately planning your maintenance schedule. Failing to perform regular maintenance checks will likely lead to residents moving out, as no one wants to live at a property where neglect and disorder is the regular state of things.
Capital improvements include anything done to enhance the value of the property. Usually these items are more costly than maintenance, though sometimes routine maintenance can lead to the decision to undertake a capital improvement project. For example, an inspection of your mechanical system might reveal that it's highly inefficient. If you decide to replace it with a more efficient system, this would constitute a capital improvement. This category also applies to such items as:
- Installing new HVAC systems
- Adding a new pool, gym or clubhouse
- Installing new elevators
- Undertaking major landscaping projects
- Installing new sidewalks
- Increasing the availability of parking spaces
For capital improvements, your budget will vary from year to year. This allotment is called "reserve funds." It's best to decide which projects are priorities and set aside money ahead of time. A condominium corporation typically approves any capital investments in the property. These projects typically take a while and are much more involved than routine maintenance.
If you want support with maintenance or capital improvements, then Imperial Properties can help. Imperial Properties has developed a strong reputation for sound, effective condominium and residential property management. Our team is a leader in our field because we offer unparalleled management expertise combined with exceptional service, knowledge, efficiency and cost effectiveness to serve our diverse client base. Contact us today to learn more about how we can help you and your property.