We’ve all heard about the benefits of home ownership, but what about a home for your growing business? When your operations have grown to the limits of your initial setup, you may be wondering about what it will take to relocate and continue to grow successfully. So why own a new building when you can rent an existing property?
Ready to build more, right here in the prairies; with relatively inexpensive land, a growing economy, and experienced commercial builders ready to turn your idea into a purpose-built new space, expansion is an option. So: is it really better to own your new property? Let us show you why, yes, we think so.
The Fiscal Pros of Commercial Building Ownership
Managing your long-term overhead may seem impossible, but, by owning your property, that’s far from the truth. Beyond the unpredictable cash flow related to your day-to-day, as well as increasing material and labour costs, one factor you can control— your mortgage.
With a mortgage, you can expect regular, incremental payments with a definitive end. Compare this with leasing, where unplanned changes in rates go hand-in-hand with a payment plan that extends indefinitely into your future at your current location.
Not only that, but when it comes time to expand again, you can sell your property—often for a significant profit. After all, when you own your own property, you can gain from capital appreciation. This is simply the rise in your property’s worth over time. But, of course, the rate of capital appreciation fluctuates depending on a number of variables, including interest rates, local supply and demand dynamics, and inflation.
In short, building a new property adds predictability to costs, an end date for your payments, and a lump sale at the conclusion of your time in the space.
Your Space, Your Plan, Your Success
You understand your business and customers better than anyone else, so why should you settle for a building you weren’t there to design?
Renting involves choosing the best fit from a small pool of possibilities. For example, one potential unit may have a large bay door but require a new HVAC system for your type of manufacturing. Or, it may have an impressive shop floor but needs more space for offices, meetings, or retail space. By choosing a design-build team to work alongside you to determine the best possible plan to suit your business, you are setting yourself up for better outcomes in delivering superior products and services.
Additionally, the long-term investment in your new build may be even more attractive when considering how the building type and its value influence leases. For instance, building costs in Alberta differ drastically depending on the type of building you are constructing, with warehouse-style buildings costing almost half as much as office buildings. With that in mind, choosing to build your ideal space rather than renting an existing property might save you in the long term when your build (and its associated costs) is not inflated by the type of building you might otherwise lease at a higher rate.
The Cons of a New Commercial Building
Nothing is perfect, and constructing new real estate is no different. As with renting a home, having to pay out-of-pocket for repairs, being restricted to affordable land, and recession-proofing your equity poses significant challenges that may leave a new build of reach. For these considerations and more, we suggest talking with your design build team directly and openly about any apprehensions you may have about the process.
Sometimes, easy fixes are under our noses-it just takes experience to see them.
Commissioning a new building is an exciting time for any business owner, and your plans deserve utmost care when you choose to break ground. Whether it’s just taking a look at your growing needs, pitching building improvements, or handling the new build process from start to finish, our team is eager to help you grow your business. Click here for a free quote from our experienced Albertan design-build team!