How to choose between buying and renting a modular building ?

There are three construction alternatives when you decide to expand your production facilities or storage area :

• Traditional construction
• The use of a logistics platform
• Renting or buying a modular building

The advantage of modular construction is that you can respond quickly to your needs for surface extension and gain in reactivity to the changes in your company.

But is it better to buy or rent modular structures? This article will guide you in choosing the best option for your situation :

1. Learn how to qualify your need for extension
2. Identify the advantages and disadvantages of renting
3. Identify the advantages and disadvantages of selling

1 - How to qualify your need for space ?

Many manufacturers turn to temporary buildings because they want a quick and cost-effective solution for their building construction. But when you look on the internet, you soon realise that there is a multitude of offers, and it is difficult to understand what each one is about.

Whether you want to rent or buy your modular warehouse, you need to qualify your project according to two factors :

1. The objective of your surface extension project
2. How long you need it for

Why do you need a new building ?

• Building a temporary or permanent workshop
• Expand your storage area temporarily or permanently

For how long do you need this new area?

1. Do you need this space for a few months ?
2. Is your need recurring ?
3. Is your order intake growing on a sustainable basis ?
4. Do you need to set up storage areas in case of peaks in activity ?
5. Does your company own the location ?
6. Do you need to replace an existing building that is damaged or unfit for
   use ?

In the short or long term, the choice of materials for the frame, perimeter and roof may differ. The advantage of a modular solution is that it can be composed according to the level of robustness and insulation required by your activity.

2 - Why rent a modular building?

It is more common to rent than to buy a modular structure. Renting is the best option if you don't know how long you will need the space for, or if your need is short term :

• Response to a seasonal peak in activity (recurring or not)
• Upgrading work on your main buildings
• Relocation of production or storage after a disaster
• Installation of a temporary sales area
• Temporary or planned production workshop

Renting also allows you to fully control your costs and investments according to the variation of your production or storage :

• The modular building is included in your expenses (USGAAP or IAS17) and does not need to be depreciated
• The TCO (Total Cost of Ownership) is low because the building is classified as a deconsolidating OPEX
• The contract can easily be suspended or extended to new buildings in case of increased activity
  
  

The building can be made available to your company quickly: 15 days^[1] after signing for a storage tent and 3 months^[1] for a temporary storage building. Unlike traditional buildings, little preliminary work is required before the structure is erected. This allows modular buildings to be added or removed easily and the rental period can be adjusted to suit your business.

3 - Why buy a modular building ?

For a long-term project, a modular building can be an ideal solution for a permanent storage area or production workshop :

• New production or packaging lines
• Internalisation of storage
• Storage in a controlled area
• Reorganisation of the flow of your industrial site
• Final production workshop
• Preparation or dispatch area
• Hosting of companies

On the long term, the purchase of a modular structure can be more profitable than renting. Indeed, the new modular building allows you to increase the value of your assets and to depreciate your new fixed asset, while being less expensive than a traditional construction. The investment is classified as CAPEX.

Before investing, consider that the installation is only part of the TCO of your project. Here are some additional costs to consider :

• Energy costs (lighting, heating, air conditioning, powering machines, etc.)
• Maintenance costs (which involve either using a service provider or dedicating person to this function)
• Security (video surveillance, alarms but also sanitary certifications)
• Insurance and taxes

The demountable industrial building is available to you in less than 3 months^[2], and can be rearranged if your company's activity drops.
For varying needs, modular solutions provide a flexible and cost-effective response to your industrial challenges. Locabri provides fast, economical and scalable modular solutions for industrial companies. Proludic SA has used Locabri modular warehouses to solve its storage problems. Discover the concrete benefits of a 10-year partnership between the two companies in this case study :

[1] Typical timeframes
[2] Typical timeframe