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Podcast: BiggerPockets Daily
Episode: Capital Expenditures (CapEx): Definition, Formula, Examples by Brian Carberry
Description: Capital expenditure (CapEx) is a common term for many businesses and real estate investors. Understanding CapEx and how it’s calculated is important for knowing how much rent to charge each month to ensure long-term profitability. It can help you prepare for future maintenance expenses, and it’s also used by lenders when evaluating your business for a loan.What Is Capital Expenditure?Capital expenditure refers to money used by businesses to buy, upgrade, and maintain long-term physical assets. Also called fixed assets, these are items that businesses expect will improve their future cash flow.