In 2012 there were over 5.6 million commercial buildings in the country, covering over 87 billion square feet of space. This represents an increase of 46 percent since 1979. It is estimated that by 2040 this number will increase to 109 billion square feet.
This huge amount of growth is due to several factors, with one of the most appealing being how lucrative commercial building construction can be.
If you have made the decision to join this group of investors, then you have to be careful with both your time and your money. There are far too many commercial building owners who don’t prepare properly prior to making an investment, which can have negative effects in the long run.
Do you want to avoid these misfortunes? If so, use the information and tips found here.
Spend some tip planning and budgeting your commercial construction project. Think about what size the building will be, what size the work area needs to be, how many rooms will be in the building, etc. You also need to consider potential future expansion.
If your building grows in the future, is there enough space to accommodate this? If not, what solution do you have in mind? You need to have answers to these questions before moving forward with the construction.
Determine Your Project Budget
Budgeting is just as important as planning. Be extremely detailed when listing all the expenses that will be incurred as the building is constructed. This includes the big expenses, such as wages, equipment rentals, cement, etc., as well as the smaller expenses, such as office supplies, breakroom stock, etc.
The more thorough you can be with your budget, the better you will be at keeping your expenses in check. It’s highly recommended for you to maintain an additional 10 percent of your budget as a reserve to handle any unexpected expenses that may arise during construction.
Choose Your Contractor
When it’s time to hire a contractor, inspect their license to ensure they have met all requirements and laws. If possible, get in touch with past customers to see if the contractor is punctual and trustworthy.
Take some time to look into the construction methods used by the contractor, too. Modern techniques help to create buildings that are much stronger.
Be sure to arrange financing for the construction as soon as you can. Regardless of if you are using construction loans, or another source of funding, get it lined up so your contractor can begin working right away.
Keep in mind, when getting any type of loan, you will have to provide a P&L account and balance sheet. Also, the land and building will likely be collateral for the money received.
It’s a good idea to speak to several lenders before choosing one. This can help ensure you get the best deal for your needs.
Acquire the Proper Building Permits
To move ahead with your commercial construction plans, you need the proper building permit. Be sure to apply for this as soon as you decide on the new building. It can take some time to receive the permit.
Additional documentation may be needed depending on the type of building you plan to construct. Be sure to keep this in mind so your application isn’t rejected.
The construction of a new commercial building can be a great investment and one that helps you make quite a bit of money now, and in the future.
However, before moving forward, be sure to consider the factors here to ensure you don’t make common and costly mistakes.
Disclaimer: This content does not necessarily represent the views of IWB.