Capital Expenditure (CapEx)

Spending on long-lived improvements like roads, water lines, or new homes — excluded from NOI.

Capital expenditure is spending on assets with a useful life longer than one year — paving, sewer line replacement, infill homes, clubhouse construction. CapEx is treated separately from operating expenses on the P&L because it is not deducted from NOI; lenders and investors expect to see CapEx broken out clearly so they can model future capital calls. Common MHP CapEx categories include road and grading, water and sewer infrastructure, common-area amenities, signage, landscaping, and infill home acquisition.

Related Terms

Infill

The process of bringing in new homes to fill vacant lots, expanding revenue without acquiring new land.
Net Operating Income (NOI)

A park's annual revenue minus operating expenses, but before debt service and capex.
Preventive Maintenance

Regularly scheduled maintenance to catch problems before they fail, reducing emergency repairs.

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