Utilities and the Site Selection Process

site_selection_process_and_utilitiesThe site selection process is one that has to be looked at very carefully and with a lot of depth. You want to consider every possibility and every angle for what you need, starting with your business. A smart buyer also considers the possibilities of what could go wrong and how you would deal with those scenarios. Taking into account the cost of utilities will make sure you avoid surprises with monthly expenses.

Lots of things factor into your utility bills. The biggest factor is consumption. Obviously, if you use a lot of water or electricity, that bill is going to be high. For restaurants and other businesses that are going to use a lot of power, water, or both, you’re going to expect those bills to be substantial business operation costs. If you already know the quantities are going to be consistently large, investigate the cost per unit of each utility in surrounding markets. For example, if one county or municipality is charging $X per gallon of water used, but the neighboring area charges less, that money will quickly add up and affect operational cost. Not all utility companies charge everyone the same amount for the same utilities.

The other factors that matter in the site selection process are age, upkeep, efficiency, and price of utilities. The age of the building matters because the standards for efficiency have changed over the years. Old methods of insulation for windows, for example, have become outdated and have given way to new windows with better seals for less draft. Maintenance and upkeep are the bread and butter to keeping the costs down for utilities. Fixing any cracks in walls or seals, stopping running faucets, and preventative maintenance keep buildings operating at lower cost. During the site selection process, be sure to ask questions about how the buildings have been kept over the years.

As time goes on, appliances get to be more efficient and use less energy. Hot water heaters, heat pumps, air conditioning units, and all other major appliances are using less energy to do better work. Buildings with efficient design make the most of natural light to lessen the burden for electricity. Fortunately, since these features tend to be very popular, real estate agents are usually quick to mention them. Having a more efficient building and appliances means less operational cost for your business.

Investigate the area you plan to operate in to see what the cost of utilities is going to be. Calling the power company and the local government will direct you to people who can let you know what to expect for the per unit cost of all utilities.

 Commercial Real Estate Market | Closing the Deal

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