Renovate an Existing Office Space or Build a New One?
As your business expands, so will your need for space. This guide provides a few points to consider when determining whether to build a new office space or renovate an existing property. When you’re ready to make a decision, you can use a business loan calculator to determine which business loan is right for you. After you factor the costs, be sure to consult an architectural firm that can help lay out a plan and manage the details.
The unique benefits and challenges of renovating an existing office
Both buying and renovating a new office space, or renovating the space you currently occupy, are traditionally less expensive options than building new. However, both come with unique challenges that are important to consider before making a final decision. Make sure to have a building inspector thoroughly evaluate the property and get quotes from contractors to ensure your predicted budget is as close to the mark as possible.
Below are a few important points to consider if you’re still deciding which option is most beneficial for your business.
- Benefits of renovating a new space: Buying and renovating a new space can provide more flexibility in terms of location since you can consider existing structures rather than empty lots. Similarly, when converting an existing space, most utilities and infrastructure are likely already in place, making renovation a more economical and expedient choice.
- Challenges of renovation: If you’re renovating a space you currently occupy, the disruption caused by construction can seriously impede your company’s workflow. Consider options like having your employees work remotely or providing a temporary work space for the duration of the renovation process. You may also discover unanticipated issues such as outdated electrical or structural issues during construction, which, after being brought up to code, will add to the final cost. Be sure to allow for such contingencies when predicting the total cost of your renovation process.
The unique benefits and challenges of building a new office
Starting with a fresh canvas is an attractive option for many business owners. However, as the more expensive option when compared with renovating an existing office space, it’s a smart idea to allow for extra time during the planning stages when building a new office from the ground up. This will allow you time to consult with architects, builders, and lenders to determine an accurate cost estimate before making any decisions.
- Benefits of building a new space: A new office space offers the chance to start with a clean slate and completely customize the building to your needs both inside and out. Because everything is new, you’re less likely to be surprised by unforeseen, hidden expenses like old wiring or a damaged foundation that can be encountered during renovation projects. Also, if you have a long-term plan to stay in the building, the real estate investment can become a beneficial asset to your financial future.
- Challenges of building a new space: The most important consideration for building new is avoiding the element of surprise, both for estimated cost and total time. Unique costs to anticipate when building new include potential permit applications, code regulations, legal fees, and all new building material. Costs can fluctuate as the project progresses, so allow a financial cushion in addition to the predicted total cost. In addition to planning for extra costs, don’t neglect to factor extra time into your decision both in the planning and execution stages. Giving yourself more time to plan will allow you to research cost-saving options like finding an empty plot and avoiding demolition fees. Also, anticipating that the construction may take longer than the estimated projections will keep you from being caught off guard in the case that construction takes more time than what you’ve worked into the schedule.
Plan for the unexpected
Whether you renovate or build new, it is possible that the project may take longer than expected or go over budget; planning for the stress of the process is as important as making the construction plans. Remember to stay patient, focus on the end goal, and enjoy taking this exciting new step in the growth of your business.
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Disclaimer: Views expressed may not necessarily reflect those of Citizens Bank. The information contained herein is for informational purposes only as a service to the public, and is not legal advice or a substitute for legal counsel, nor does it constitute advertising or a solicitation. You should do your own research and/or contact your own legal or tax advisor for assistance with questions you may have on the information contained herein.