So You Want To Build Your Own Office Space
You feel like you’re throwing away money each month on rent, right? So you thought to yourself, “What if…I build my own office space in the Washington and Frederick County, MD area? Property is cheaper and interest rates are lower than ever, so why not make the plunge? Maybe I’ll get a tenant or two to offset the cost.”
There are obvious benefits. With ownership comes control. The property could dramatically appreciate in value over time. Or it could depreciate. Building and owning your own commercial building obviously requires serious short-term and long-term planning. Consider the following factors:
It will take months to interview and hire professionals, design the structure, buy land, arrange financing and get all necessary approvals. Then it will take many more months to build, depending on the size of the building, the professionals you’ve hired, and factors you don’t control, like the weather. You also have to account for time each day that you’ll need to dedicate to the project.
How much do you need? Typically, you need five square feet of land for every one square foot necessary to run your business. Where do you want to be? Is land available there for commercial use? What about utilities, traffic flow and parking? Are there any future plans that could affect or even obliterate the site? What about environmental concerns? These questions all need to be answered before you choose a piece of land.
If you’re going to build a commercial property from the ground up, it better suit your needs to a tee. Make sure you hire an architect and builder who are familiar with the kind of structure that suits your industry or type of business. Just like any office space, it should allow room for expansion or even contraction. If you plan to have tenants, you need to make sure each space is up to code. Consider fire codes, handicapped access, water, utilities, sewage, and construction codes and requirements.
You need to arrange both construction financing and long-term financing. Construction financing will protect you from unscrupulous contractors and subcontractors. Long-term financing will usually take over the construction financing. Commercial property financing is extremely complex, so it’s important to work with a professional who can help you formulate the most effective strategy.
Many people are great tenants but horrible landlords. You may be a great business owner, but that doesn’t mean you’ll be a great property manager. Count on unforeseen problems and seasonal challenges popping up. Also, if your time is already stretched too thin, there are property management companies who specialize in this type of work.
You monthly expenses go far beyond paying back your loan. Taxes, insurance, utilities, maintenance, landscaping, energy, and trash removal are just the beginning. You need to do your research, figure out your monthly cost, and see how that compares to renting office space.
We understand that this a lot to absorb. If you’re interested in exploring the possibility of building a commercial property for your business, contact us today. Ghattas Enterprises will help you understand and manage the entire process from start to finish.