As a property owner, you want to do everything in your power to make sure your property looks great and maintains its value. Whether you own a residential building or commercial building, there are improvements that can be made to increase the overall value of that structure. These capital improvements include things like expanding the floor plan, maintaining the common grounds in a multi-dwelling unit or replacing the HVAC system in a commercial building. Regardless, every property owner wants to ensure that the upkeep and maintenance of their residential or commercial structure is properly done.
The IRS even classifieds capital improvement as those projects that improve upon a building appearance and more importantly their value. Before you endeavor into any type of renovation, it is important to understand what qualifies as a Capital Improvement. This is important because you want to make sure you’re spending your dollars wisely to maximize the value and possibly gain a tax benefit from any improvements that are made.
Adding square footage to a home.
A home addition or adding square footage to your home would be considered a capital improvement. The mere fact that you’re adding square footage to your home would increase your property value. It is important to understand how the square footage should be added to fully maximize the value you’re trying to achieve. Simply adding random square footage will not necessarily increase your home’s value.
This is where the experience of a professional contractor can be helpful. It is important to utilize their expertise to determine how adding square footage can impact your home’s value. Expanding the back of your home to make your living room larger will increase the square footage, but it may not necessarily increase the value. The way you impact the value of your home is by adding rooms that are significant. A great example is adding an additional bedroom or bathroom. Realtors know that adding an additional bedroom and bath to increase the square footage is not only considered a capital investment but will maximize the added value you want to achieve.
Capital improvements for a commercial building.
While the theory of adding value to real estate property is the same for residential and commercial properties, the effects in the outcome can be significantly different. It is also important to understand that maintaining a property versus adding value are two totally different things. The value of a commercial building is directly tied to the amount of rent they collect. Adding value for those types of structures are slightly different than for residential properties. For example, in a commercial space giving the building a facelift is a starting point to increasing the value. When the cosmetic improvements are made, this enables property owners to increase the amount of rent they charge. When the rental rates are increased, that reflects an increase in the value of the commercial structure.
Cosmetic improvements can include giving the exterior of the building a makeover with paint, replacement of materials or even paving the parking lot to enhance the property’s aesthetics. Other ways to improve a commercial space are to freshen up the lobby area with a fresh coat of paint, updated flooring materials and even changing old furniture out for newer more modern furniture pieces. In such cases, it is important to employ the services of an experienced contractor who is knowledgeable about commercial renovations.
Capital improvements for multi-dwelling units.
Like commercial buildings, you’re able to increase the value of a multi-dwelling unit by increasing the rent. The best way to increase the rent is to make improvements that will justify or explain the increase. A quick way to increase the property value is through curb appeal and cosmetic repairs. Since first impressions matter the most when individuals are shopping for apartment homes, it is imperative to maintain the curb appeal of your multi-dwelling unit to attract more customers. Any cosmetic eyesores such as malfunctioning light fixtures, chipped paint on the exterior, or an unattractive pool area are other exterior cosmetic improvements that can be made.
With the interior, you’re not able to add square footage to a multi-dwelling unit to increase the value. You are however able to paint the interior of the units, replace and update flooring and add new fixtures within each apartment unit to justify an increase in rent. Please understand, adding a new light fixture to an apartment unit does not inherently increase the value. Because of the updating of appliances and fixtures, you’re able to justify an increase in rental rates. Again, increasing rent rates is one of the main ways to increase the value of a multi-dwelling unit.
It is important when undertaking a renovation or capital Improvement project to consult with an experienced and professional contractor that can lead and guide you in the right way to spend your improvement dollars. You want to make sure that you’re getting the most value for every dollar spent on any improvements made in every apartment home within the multi-dwelling unit.
Bruce Gardner Co. is a general contractor in the Phoenix
Arizona area that specializes in capital improvements. Whether you’re looking to increase the value of your residential property or your commercial space, their team of experienced professionals are able to guide you through the process to ensure you’re making the best use of your renovation budget.
With over 40 years of experience, their team of experts have the experience you need when endeavoring in a huge renovation project. Whether you’re looking to do a complete home remodel or a restoration project, they’re able to provide you the assistance you need that will increase the value of your property and maximize your return on investment. They bring decades of experience and quality to each project. Their work ethic is reflected in every project they manage and they are sure to get the job done the way you want it. Give them a call today. They have representatives waiting to assist you in all of your capital improvement needs.