Which type of expenditure in property management aims to increase a building's value?

Capital expenditures are intended to enhance a property's value or extend its useful life through significant improvements or upgrades. These expenditures typically involve substantial investments, such as renovations, new roofs, upgrading HVAC systems, or adding amenities. Since these improvements are designed to elevate the overall value and appeal of the property, they are considered a vital strategy in property management for increasing market value and potentially generating higher revenue through increased rent or sale price.

In contrast, maintenance costs focus on the routine upkeep necessary to maintain a property in good working condition but do not necessarily add value. Operating expenses encompass all costs related to the day-to-day functioning of a property but are usually ongoing and are not intended to create long-term value increases. Tenant improvement costs are typically associated with modifications or enhancements made to a rental space to meet specific tenant needs; while they can improve tenant satisfaction, these costs are generally related to lease agreements and do not inherently drive value appreciation in the property itself.