Budgeting Tips For Commercial Capital Improvement Projects

Capital improvement projects are often necessary to extend the life of a commercial property. They also increase the value of your property for eventual resale. However, without a defined budget, these capital improvement projects can quickly become unmanageably expensive. Putting together a detailed financial plan ahead of time can help you stay on track financially throughout the project. Here are some helpful budgeting tips for commercial capital improvement projects.

What Are Capital Improvements?

Capital improvements are repairs or additions to your property that are intended to add financial value or expand the lifespan of your property. Some capital improvements will be necessary in order to keep your property in good condition, while others are proactive projects. Common capital improvement projects for commercial properties include new HVAC systems, a new roof, upgraded appliances, and new floors, just to name a few.

Create A Timeline For Large Projects

Before you start any capital improvements, assess your entire building to determine what repairs and upgrades will be necessary moving forward. After assessing the entire building, you can put together a timeline for all necessary capital repairs and start planning ahead. Be as detailed as possible in your plan now to avoid confusion later on.

Start Saving Early

Even if you purchase a property brand-new, there’s a good chance you will need to make capital improvement projects at some point during your ownership. Start allocating money for capital improvements far before you actually need it, even if it’s a small amount. You may not be able to pay for your capital improvement projects up front, but these savings can minimize the amount of debt you have to take on. Having money saved up before the project starts can also help you snag a lower interest rate if you do need to take out a loan.

Get Accurate Estimates

Getting estimates from a third party before you start working can help you plan more accurately throughout the capital improvement process. Researching similar projects that have happened in your area is a great place to start. From there, you can reach out to contractors in your area to get a more accurate quote.

Budget More Than You Think You Need

It’s very common for new expenses to pop up in the middle of a capital improvement project, regardless of how well you’ve planned ahead. When putting together your budget, allocate more money than you anticipate using for each project. This way, you have some flexibility throughout the project and can easily handle any emergencies that come up.

At New Horizon Construction Services, we help our clients with a broad range of commercial capital improvement projects. We are an Orlando-based general contractor with extensive experience in commercial construction. If you’re interested in learning more about our services, give us a call at 407-574-2164 or contact us through our website.