How to Develop a Capital Improvement Plan for Your Building

When it comes to maintaining or modernizing your building, a solid capital improvement plan can make all the difference. From updating HVAC systems and electrical infrastructure to enhancing curb appeal and structural integrity, these plans are designed to support long-term value and efficiency.

Because capital improvement projects often involve multiple phases, systems, and budgets, having a clear, well-structured plan in place is key to ensuring the work is both manageable and financially sustainable.

Steps for Initiating a Feasible Capital Improvement Plan

Whether you’re planning upgrades for a commercial property or making long-term improvements to a multi-unit building, these steps can help you build a capital improvement plan that supports smart decisions—and successful results.

Determine Needs, Priorities, and Goals

Start by assessing what the building needs most—whether it’s system upgrades, safety improvements, or modern amenities. Then take a closer look at which areas require attention, and how those updates align with your long-term goals.

Once you have a full list, prioritize those needs based on urgency, potential impact, and budget. Setting clear goals—like improving energy efficiency, reducing maintenance costs, or increasing property value—will help shape your project scope and timeline.

Establish the Project’s Budget and Accounting Strategy

Every improvement project starts with a budget—and the more detailed it is, the better. Begin by estimating the costs for materials, labor, permits, and other expenses. This will help you determine whether the project is financially feasible, and allow you to plan accordingly.

In addition to a total project budget, consider building out an annual or phased budget. Knowing what you’ll spend and when can make it easier to manage cash flow, reduce surprises, and stay on track as the work progresses.

Determine a Source of Funding

Once your budget is in place, it’s time to explore how you’ll fund the project. You may plan to cover costs through revenue generated by the property, or you might consider outside funding such as business loans, credit options, or investor contributions.

In some cases, capital improvement plans may impact rent structures or service fees—so it’s important to factor those adjustments into your funding strategy and communicate them clearly with tenants or stakeholders.

Communicate With Stakeholders

Capital improvement projects can affect tenants, investors, and property managers—so transparent, proactive communication is essential. Share key details like the project timeline, areas that may be temporarily closed, and any changes to pricing.

Keeping everyone informed not only helps maintain trust—it also reduces confusion and ensures your stakeholders feel like valued partners throughout the process.

Discuss Capital Improvement Plans With Local Experts

A well-planned capital improvement strategy can strengthen your building—and your bottom line. At Machias Savings Bank, we understand the unique challenges and opportunities that come with property upgrades, and we’re here to help you move forward with confidence.

Whether you’re exploring funding options or looking for guidance on managing costs, meet our business banking team to learn how we can support your next big step.

Our Disclosure: For informational purposes only. There is NO WARRANTY, expressed or implied, for the accuracy of this information or its applicability to your financial situation. Please consult your financial and/or tax advisor.