CapEx – Capital Expenditures and the balance of improvement & ROI
Capital Expenditure – CAPEX
Capital expenditure, or CapEx, are funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment. CapEx is often used to undertake new projects or investments by the firm. This type of financial outlay is also made by companies to maintain or increase the scope of their operations.
Breaking it Down:
Capital expenditures are a necessity that all property owners try to maintain a balance in. Investors upgrade properties to sell for a profit, however do not over expend as you increase risk without reward.
Example: Don’t put in a pool in an area that pools do not do well in, as pools only bring in about 25-35% of paid value on return. However putting in wood floors brings in a 200%+ return on investment. More bang on the return for improvement.
Commercial mortgage guru, 12+ Years in the real estate business with over 120 successful transactions. Financing commercial real estate, and funding small businesses for start-up, expansion, and growth.
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