Property Management Licensing Practice Exam · Question
Which of the following describes 'capital expenditures' for a rental property?
Capital expenditures are significant investments that add to the value of a property, prolong its useful life, or adapt it to new uses, rather than simply maint
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Question: Which of the following describes 'capital expenditures' for a rental property?
Answer options:
- Routine monthly utility bills.
- Costs incurred for minor repairs like fixing a leaky faucet. ✅ Major improvements or upgrades that increase the property's value or extend its useful life (e.g., new roof, HVAC system).
- Advertising costs for vacant units.
Correct answer: Major improvements or upgrades that increase the property's value or extend its useful life (e.g., new roof, HVAC system).
Explanation: Capital expenditures are significant investments that add to the value of a property, prolong its useful life, or adapt it to new uses, rather than simply maintaining its current state.
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