Capital Improvement

AAA

DEFINITION of 'Capital Improvement'

The addition of a permanent structural improvement or the restoration of some aspect of a property that will either enhance the property's overall value or increases its useful life. Although the scale of the capital improvement can vary, capital improvements can be made by both individual homeowners and large-scale property owners.

INVESTOPEDIA EXPLAINS 'Capital Improvement'

For example, if Jack buys a new hot water heater and tool shed for his property, both would be considered capital improvements to his house. Similarly, the creation of a new public park in the downtown area would also be considered a capital improvement for the city. In both these cases, the new additions would make the respective properties more valuable.

RELATED TERMS
  1. Real Estate

    Land plus anything on it, including buildings and natural resources.
  2. Betterment Insurance

    Betterment insurance refers to insurance coverage that a tenant ...
  3. Future Capital Maintenance

    A term used to account for future expenses that a company expects ...
  4. Tangible Asset

    Assets that have a physical form. Tangible assets include both ...
  5. Property

    1. Anything over which a person or business has legal title. ...
  6. Personal Property

    A type of property which, in its most general definition, can ...
Related Articles
  1. Personal Finance

    To Rent Or Buy? There's More To It Than Money

    Your lifestyle, level of commitment and the trade-offs need to be carefully weighed.
  2. Home & Auto

    To Rent Or Buy? The Financial Issues

    Thinking of buying a home? We look at the initial and ongoing costs, as well as the so-called benefits.
  3. Taxes

    A Tax Primer For Homeowners

    Go beyond interest and find out how mortgage points affect your taxable income.
  4. Taxes

    5 Tricks For Lowering Your Property Tax

    Find out what steps you can take to reduce your bill.
  5. Taxes

    Avoid Capital Gains Tax On Your Home Sale

    If you have property to sell and want to avoid capital gains tax, a Section 1031 exchange may be the answer.
  6. Insurance

    Homeowners Insurance Losers: States That Pay Most

    Which states charge you the most for homeowner's insurance? Hint: They're regularly featured on the Weather Channel.
  7. Home & Auto

    7 Ways To Increase Your Home's Appraisal Value

    When it's time to sell your home – or refinance it – it will need to be appraised. Here's how to make sure the valuation is as high as possible.
  8. Home & Auto

    Strategic Bathroom Enhancements With Huge Returns

    Even modest investments to improve a small bathroom can yield considerable rewards.
  9. Home & Auto

    Key Home Upgrades That Make Or Break The Deal

    When making a home purchase, pay attention to key features of the home that either should meet a certain standard or should be upgraded by the seller.
  10. Insurance

    Which States Have the Cheapest Home Insurance?

    You can't choose where you live by its insurance rates. But if you did, these are the states to pick.

You May Also Like

Hot Definitions
  1. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  2. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  3. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  4. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  5. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  6. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
Trading Center