What does “capital expenditures” refer to in property management?

Capital expenditures in property management refer to significant improvements or repairs made to a property that enhance its value or extend its useful life. This includes major projects such as renovations, roof replacements, and significant system upgrades that are designed to improve the property’s functionality or aesthetics. These expenditures are typically substantial investments that provide long-term benefits, distinguishing them from routine maintenance, which is focused on keeping a property in its current condition rather than enhancing its overall value or performance.

The other options describe different types of expenses. Routine maintenance and cleaning costs are ongoing expenses necessary to keep the property operational and appealing, but they do not constitute capital expenditures, as they do not significantly enhance the property. Monthly operational expenses encompass day-to-day costs like utilities and management fees, which are also separate from capital expenditures. Lastly, the cost associated with tenant communication systems pertains to operational functionality rather than improvements or repairs that increase property value, further highlighting the distinction between operational and capital expenditures.