Renovation is a natural part of the commercial property ownership lifecycle.

Whether you’re updating old fixtures or upgrading critical systems, estimating how much your renovation project will cost can be challenging.

At first, the project may seem simple, but things can get complicated along the way, causing project costs to spiral out of control quickly. Costs can vary from $30 per square foot to over $200, depending on many factors, including the changing labor and material costs.

Additionally, unforeseen complications during renovation can raise the prices of the estimates, even after the project is finished.

So, how can you save money during a renovation?

In this article, we’ll discuss how investors and property managers can keep down the costs of commercial property renovation. 

Let’s dive in!

1. Hire the Right Contractors

Hiring a contractor may increase the project’s cost, but only temporarily.

However, hiring the wrong contractor will increase the costs down the line.

With the wrong contractor, you may have to contend with sub-par quality of work, delays, and even legal liability in the future. A reputable contractor, on the other hand, will ensure your renovation project goes smoothly and as planned.

This can translate to quality work and cost savings in the future. Additionally, a professional contractor can even point out areas that, if improved, can add value to your property.

2. Reduce Repairs with Predictive Maintenance

Essential equipment, like HVAC systems, requires regular attention to avoid extensive repairs and work interruptions. Replace old systems with professionally installed equipment that will require less maintenance and operating costs over time.

Additionally, switch from preventive maintenance to predictive maintenance.

Instead of scheduling inspections to check whether there are system defects, use automated systems that will let you know when the system will need servicing. This will minimize the number of emergency repairs and reduce labor costs associated with those inspections.

3. Buy Property that Doesn’t Need too Much Renovation

A great way to keep renovation costs down is to buy a property that’s in great condition.

Most commercial property renovations fail to pay themselves at resale. Unless the purchase price is incredibly low, even after factoring in the renovation costs, it’s advisable to avoid any commercial property that will drain your pocket on repairs.

You could opt for a new commercial building, which will surely come at a high price but will save you on renovations. Or opt for a second-hand property that’s in immaculate condition.

If you’re in New York, you can start by checking out commercial real estate for sale in Staten Island, NY listed on reputable sites like PreReal. Or seek the help of a New York-based real estate agency at a fee.

4. Choose Renovation Loans Over Other Loans

If you’re considering getting a loan to finance your renovation project, we suggest getting a renovation loan over other loan types.

Renovation loans feature low-interest rates compared to other types of loans.

On average, renovation loans charge an interest rate of around 4% p.a., while other loan types, like personal loans, usually charge an average interest rate of 6% per annum.

If you have some savings, use them up before resorting to a renovation loan. This way, you won’t have to take out a full loan amount, and you can save a few hundred dollars in interest. Note that different lenders charge different rates, so it’s important to shop around before settling on any lender.

5. Have a Budget

Having a budget can help you control your spending on renovations.

Knowing how much you plan to spend and where to spend it can help to ensure your priorities are addressed appropriately. Your budget doesn’t need to be a professional balance sheet format—the kind prepared by cost accountants.

A simple spreadsheet should do the trick. Just make sure it portrays the amount you intend to spend alongside the estimated cost of each item in your renovation project.

Wrapping Up

There are a lot of strategies businesses can employ to cut renovation costs.

By following the tips mentioned above, you’ll be able to keep renovation costs down and maximize your return on investment (ROI).