Masonry Magazine September 1971 Page. 25
NCMA-TEK
An Information series from National Concrete Masonry Association
Introduction
The most practical approach to buying a warehouse is to place yourself in the position of a seller. It is a practical approach because you may want to sell your new building sooner than you think. If you think like a seller, you will focus attention upon the all important return on your building investment.
People build warehouses today for two reasons: for their own use or to be leased to someone else.
In either case, the quality of construction has taken on greater importance, because quality ties directly into resale value. Depreciation allowances, for instance, are becoming increasingly important and often are the difference between profit and loss.
A Time To Unload
As these allowances are depleted on a building, it often becomes advantageous to sell the structure and build again. One of man's dreams of yesteryear was to build a building and leave it to his grandchildren as an investment. But most businessmen today realize that to protect the interest of their grandchildren it may be best to sell their current building and reinvest in a new one.
Astute businessmen are looking ahead seven to ten years, and
Concrete Masonry Warehouse Walls
-How To Buy A Warehouse
asking themselves and their designers this question: "What will this building be worth when it is time to unload it?"
The best way to find out what your proposed building is going to look like at the end of seven to ten years is to drive around an industrial park and look at the structures there. Would you be able to dress your building up with a coat of paint as you could with concrete masonry walls or would you have to replace whole sections of walls because they have been dented, faded by the sun, or completely rusted away at the ground level. Such repairs to get a building ready for the resale market are quite costly. Ask your real estate broker the relative resale values between a concrete masonry warehouse and a metal building.
Quality Gets Tax Break
Quality construction pays dividends. True, it costs a little more to go first class but even the government gives you a tax break for quality. The more a building costs, the greater the depreciation allowance. Normally, the more a building costs, the higher your debt service will be. The additional interest you pay on a larger loan is, of course. tax deductible. Depreciation and the interest on your loan form a large portion of your tax shelter, which is so important in today's profit picture.
If you approach the task-and it is a big task of buying a build-