A simple but fundamental tenant of business is that everyone is looking for the best deal for the best possible product. And of course construction is no exception. It is for this reason that not everyone goes the same route to obtain their offices, venues, or places to conduct business.
The way that a lot of people attempt to save money in this regard is to choose between the four following options; either build your own building, lease a building, purchase an existing building, or buy an older, dilapidated, or not perfectly suited building and renovating or overhauling the area to suit their purposes. But the answer is not always obvious as to what is the best way to save money and get what you want. A good analogy is the car industry. Some people choose to buy the brand new car right off the lot, some choose to lease their cars, some buy used, and some buy broken down cars and attempt to fix them up. Sometimes you get something that breaks down in a week, sometimes you spend too much and it loses value immediately, or you get something that you hate but are already stuck in a rental agreement for. But this article will hopefully help you differentiate between buying a lemon or a winner without wasting money.
The first thing that we will be going over is the cost of building your own space. The first thing to consider is the cost of your property. This is going to vary wildly depending on how close to any urban centers it will need to be, any specific features that will be needed to run your business, how much your property tax will be depending on state, local, and county property tax rates, and any other miscellaneous costs or fees that will come up. Keep in mind that once you have paid off your property, even though there aren’t any more payments, the property tax will be ongoing and will need to be covered year after year. But even with land and property, if you take out a loan you will be paying it off year after year. But an advantage of buying your own property, and building a building in general is that over time your property will likely only gain value. Though in the short-term it is possible that there could be market fluctuations causing it to briefly lose value, the overwhelming majority of areas will pick back up. But the one thing that they are not making more of (at least not right now) is land.
We will also need to take into account the cost of various permits and regulation compliance (city and federal mainly, but some counties and state have some red tape that’ll need to be dealt with). This will not be a problem if you hire someone to do it for you, but compliance cost will vary greatly, once again depending on where you are and what industry you are looking to enter. But the reality is that if you are looking to lease, the cost of property taxes will be included in your rent, and the cost of licenses will still need to be accounted for. The problem with leasing though is that for a lot of industries (grocers, education, public offices, etc), you will not be able to find a large enough space that can be rented and that also fulfills your needs outright or with minimal contractor work, so for certain organizations the only way that they can get what they are looking for is by building their needs.