---
title: "CapEx (Capital expenditures) — What It Means | Ondo RE"
canonical: https://www.ondorealestate.com/glossary/capex/
---

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# CapEx (Capital expenditures)

Also called: capital expenditures, capital reserve

Large, infrequent replacements (roof, HVAC, water heater), budgeted monthly even though they are paid rarely.

CapEx covers components with a long life and a large replacement cost. They are not monthly expenses, but they are entirely predictable in aggregate, which is why owners reserve for them monthly.

A property with no CapEx reserve is not more profitable; it is deferring a known bill. The roof’s age tells you roughly when it arrives.

## Related terms

- [Operating expensesThe recurring costs of running a property: taxes, insurance, management, maintenance, and owner-paid utilities.](/glossary/operating-expenses/)
- [Cash flowWhat remains each month after rent has covered operating expenses and debt service.](/glossary/cash-flow/)
- [NOI (Net Operating Income)Income after operating expenses but before debt service, taxes on income, and capital expenditures.](/glossary/noi/)
- [Maintenance reserveMoney set aside monthly for routine repairs, so ordinary problems do not become cash-flow emergencies.](/glossary/maintenance-reserve/)

## Go deeper

- [Maintenance and CapEx strategy](/blog/maintenance-capex-strategy/)

## More in Investing

- [1% rule](/glossary/one-percent-rule/)
- [1031 exchange](/glossary/1031-exchange/)
- [50% rule](/glossary/fifty-percent-rule/)
- [Appreciation](/glossary/appreciation/)
- [CAGR (Compound Annual Growth Rate)](/glossary/cagr/)
- [Cap rate (Capitalization rate)](/glossary/cap-rate/)

## Have a question about your own situation?

Ondo handles brokerage, lending, property management and notary under one roof, so the answer does not change depending on who you ask.

[Talk to Ondo](/contact/)[Browse all terms](/glossary/)