Planning for Capital Improvements on Long-term Budgets
After a long period of occupancy, different fixtures and systems in the properties need to be updated for efficiency and quality service. The cost of these renewals is quite high and does not fit as operating cost but must be planned over time as the fixtures depreciate.
Fixtures that depreciate and need renewal after sometime include the fire control systems, alarm systems, HVAC equipment, parking lots and much more. Each of the following systems has its own life expectancy after which it is going to be obsolete.
It is important to plan for capital improvements well ahead of time to avoid the shock of having to incur huge amounts of cash for the project.
To help in the planning process, it is important to hire a competent Atlanta commercial real estate company to do a survey and evaluate the life expectancy of all of the fixes on your property. After this, you should put up a fund to caper for the capital improvements when they are due. Rather than put all the required funds at once, you will be setting a part of the monthly revenue for the capital improvements.
Your Atlanta commercial real estate manager will calculate the amount of money to be saved in the sinking account by estimating the cost of renovations and dividing the amount by the number of years that the fixtures will be functional. In that line, it is also important to look at ways that the existing systems may be modified to work longer and better without an overhaul.
Be careful when selecting the real estate management firm to handle the capital improvements. It should be a firm that is known for integrity and transparency. A firm that does not have these characteristics is likely to misappropriate the funds or end up doing a shoddy job on your property.
The bottom line is that you should seek professional assistance in planning capital improvements for your Atlanta commercial properties. Most of the property owners who do the planning themselves end up spending more than required for the improvements, replacing systems when they could be serve longer and worst of all not having funds when it is time to update various systems.
When replacing the systems, ensure that quality materials and workmanship are maintained all through the projects. Remember tenant satisfaction is the number one reason for the improvements. You should ensure that the improvements add to the value of the building.
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