Initial costs include design, construction and installation, purchase or leasing, fees and charges. Future costs include all operating costs, such as rent, rates, cleaning, inspection, maintenance, repair, replacements / renewals, energy and utilities use, dismantling, disposal, security and management over the life of the built asset. Opportunity costs generally represent the cost of not having the money available for alternative investments (which would earn money) or the interest payable on loans to finance work.
The primary benefit is that costs which occur after an asset has been constructed or acquired, such as maintenance, operation or disposal, become an important consideration in decision-making. Previously, the focus has been on the up-front capital costs of a building or asset, and organisations may have failed to take account of the longer-term costs of an asset.
Whole-life costs are considered a better way of assessing value for money than construction costs, which can result in lower short-term costs but higher ongoing costs through the life of the building. This can also apply to things such as design fees, where saving money on fees at the beginning of a project can be outweighed by very much higher ongoing costs through construction and occupation.
Call us for a chat on how Soft Landings and WLC can help you improve the efficiency of your building whilst reducing operating expenditure.