What is one example of a value-add capital expenditure?

Value-add capital expenditures refer to investments made in a property that enhance its value and can often lead to higher revenues. Renovating a room is a prime example of a value-add capital expenditure because it directly improves the property’s appeal and functionality, potentially allowing for increased rental rates or occupancy. By upgrading the space, such as modernizing fixtures or improving layout, the property's overall marketability improves, contributing to a better financial performance.

The other options do not fit the definition of value-add capital expenditures in the same way. For instance, roof replacement is a necessary maintenance expenditure rather than an enhancement; it preserves the property's current condition but does not significantly increase its value. Property acquisition involves purchasing a new asset and is not an expenditure on an existing property. Landscape maintenance is typically seen as routine upkeep, essential for aesthetic appeal but not an enhancement that adds substantial value.