Overview
Real estate is one of the most important factors in the economy of the United States. No other industry touches as many people as real estate. For the vast majority of people, real estate has some effect on their lives. Commercial real estate is the building of businesses like grocery stores and shopping malls. Commercial real estate is as important as residential real estate and is generally higher dollar amounts. There are several ways in which a person or business can save money on a building project. Below are some tips on how to save big money on commercial real estate.
Labor Costs
Generally the first place that a building company goes to in order to reduce the total cost of a project is the labor costs. One of the best ways to reduce labor costs is to plan the entire project efficiently. When a project runs behind due to time or money concerns, labor costs tend to increase dramatically. However, there is another side of the equation. Many times, companies end up costing themselves a lot more in the long run when they just pick the cheapest contractors. If someone messes up the portion of the project that they are working on, in the long run more time and money are going to be spent in order to fix the original work. Although labor is a great place to go in order to reduce the total cost of a project, be careful that the integrity of the work is not compromised in the long run.
Cut Unnecessary Waste
Many times when building a several hundred thousand or million dollar building, it can be easy to over look smaller transactions. Many people rationalize smaller and more expensive transactions this way. However, as this article states it is important to treat every transaction as important in order to build a successful real estate business over time. Ask yourself if each upgrade is going to be worth the money spent or if it will add value back to the building. Whenever spending extra on a commercial project, it either needs to add value to the customers or to the building that you are working in.
Location
The phrase, “Real Estate is all about location,” is something that almost everyone has heard at some point. In many ways it is true and the location in which a business is built is an important decision. However, looking at the other side of the coin it can also be a way to save money, especially if your business services lower income customers. We talked with General Industries about this point and they said, “For example, if you have a dry cleaning business there is no reason to spend thousands of dollars a month extra because it is located in the nicest part of town. The core customers that would use the services of a dry cleaner are not going to live in that part of town, and the business would save money and see more customer traffic by locating in a part of town where customers live.”
Build A Team
Finally, it is important to build a solid team around you when managing a construction project. This article goes into more detail about tips to building a better real estate team. At the end of the day, your time is limited and you can not micro manage every aspect of a construction project. However, you can manage those that are over the construction project to insure that everything is running as efficiently as possible and you are saving as much money as possible on the project.
