Capital Expenditure Planning Checklist

Inspect roof, exterior envelope, parking lot, common areas, mechanical rooms, and a sample of unit interiors. The maintenance lead knows which systems have generated recurring work orders — that history is the most reliable signal for what's about to fail.

Note remaining useful life for each major system against its expected service life — roofs 20-25 years, HVAC compressors 12-15 years, water heaters 8-12 years. Items past 75% of expected life are typical capex candidates.

Export the work order log from AppFolio, Buildium, or Yardi for the trailing 12 months. Cluster by system and unit — three plumbing calls on the same stack in a year is a capex signal, not three repair tickets.

For each candidate, capture: system, scope, estimated cost, urgency (deferred / planned / urgent), and whether it's a true capital improvement (depreciated) or a repair (expensed). Misclassification at this stage cascades into owner tax-return errors at year-end.

Rank items on safety/habitability risk, cost of deferral, and value-add return. Habitability items (smoke detectors, heat, hot water, code violations) come off the top — they're not optional and don't compete with cosmetic upgrades.

Use vendor ballpark numbers for line items and recent comparable projects for the rest. Add a contingency reserve of 10-15% per project — change orders on capex are the rule, not the exception.

For value-add items (appliance refresh, in-unit washer/dryer, exterior repaint), project the rent premium and stabilized NOI lift. For maintenance capex (roof, HVAC), show the deferral cost — emergency replacement runs 30-50% above planned.

Send the itemized budget, prioritization, and NOI model with a recommended scope. Capture the owner's decision in writing — verbal approvals on six-figure capex create downstream disputes when the bills arrive.

Triggered when the owner rejects or asks for revisions. Document which line items came out, which deferred to next cycle, and what the new total is. Re-run the NOI model on the trimmed scope before resubmitting.

Pull three qualified bidders per trade — roofers, HVAC, plumbing, electrical, paint. Verify state contractor license is active and check disciplinary history with the state board. Single-bid jobs invite owner-approval friction later.

Vague scopes produce vague bids. Specify materials (manufacturer, model, warranty), quantity, removal-and-disposal responsibility, working hours, and tenant-access constraints. Apples-to-apples bids depend on apples-to-apples scopes.

COI must show current general liability and workers comp, with the property listed as additional insured. W-9 confirms 1099 vs corporate status before the first payment, not at year-end. A lapsed COI on file leaves the manager personally exposed for vendor accidents on premises.

Contract should specify scope, schedule, payment milestones, change-order process, lien-waiver requirement at each draw, and warranty terms. Avoid lump-sum upfront payment — milestone draws tied to inspected progress are the standard.

Map start, mid-project inspection, and substantial-completion milestones. Sequence trades that can't overlap (no painting before drywall, no flooring before paint). Share the schedule with onsite staff and any tenants who need access notice.

Most states require written entry notice 24-48 hours before non-emergency work in occupied units. Bundle multiple work items per visit to minimize tenant disruption — repeated entries generate complaints and habitability claims.

Reconcile invoices against the contracted milestone schedule weekly. Flag any line item trending past contingency before it consumes the reserve. Owner updates go out before bills arrive, not after.

Any scope or cost change above the contingency threshold needs written owner sign-off before the work proceeds. Verbal approvals on change orders are the most common source of disputed capex invoices at year-end.

Walk every line item against the contracted scope. Build the punch list on the spot with the vendor present — it's much harder to get punch items resolved after final payment goes out.

Triggered when the inspection fails. Hold final payment until all punch items pass re-inspection. Document the rework scope and the vendor's commit date in writing — verbal recommits slip.

Final lien waiver from the GC and conditional waivers from any subs the GC paid. Manufacturer warranties (roof, HVAC, appliances) get filed in the asset folder — they're worthless if no one can locate them when a system fails in year three.

Capital improvements are depreciated over the IRS-defined useful life (27.5 years residential, 39 years commercial for structural items; shorter for personal property). Repairs are expensed in the current year. Replacing a single $400 disposal is a repair; replacing all unit appliances at $4,000 is capex. Send the classified ledger to the owner's CPA.

Add each capitalized item to the property's fixed-asset register with placed-in-service date, cost basis, and class life. The depreciation schedule in AppFolio or Yardi is the source of truth for the owner's annual return — keep it current at closeout, not at tax time.

Capture what came in over budget and why, which vendors performed and which didn't, and which deferred items now move to next year's candidate list. Three minutes of notes here saves an hour of rediscovery in next year's assessment.