In real estate, what is the term for improvements made to a property that enhance its value?

In real estate, what is the term for improvements made to a property that enhance its value?

• A. Depreciation
• B. Upgrades
• C. Capital improvements
• D. Maintenance

Answer: (C)

The term for improvements made to a property that enhance its value is best defined as capital improvements. Capital improvements refer to significant additions or changes to a property that increase its overall value, extend its useful life, or adapt it for new uses. These improvements can include renovations, extensions, or installations of new systems that significantly enhance the property’s functionality or appeal. In contrast, depreciation refers to the loss of value over time due to wear and tear or market conditions, while upgrades typically pertain to modernizing features without necessarily being categorized as capital improvements. Maintenance focuses on the routine upkeep required to keep a property in good condition but does not necessarily add to its overall value in the same way that capital improvements do.

The term for improvements made to a property that enhance its value is best defined as capital improvements. Capital improvements refer to significant additions or changes to a property that increase its overall value, extend its useful life, or adapt it for new uses. These improvements can include renovations, extensions, or installations of new systems that significantly enhance the property’s functionality or appeal.

In contrast, depreciation refers to the loss of value over time due to wear and tear or market conditions, while upgrades typically pertain to modernizing features without necessarily being categorized as capital improvements. Maintenance focuses on the routine upkeep required to keep a property in good condition but does not necessarily add to its overall value in the same way that capital improvements do.