Why Investing in Steel Buildings Before Year-End Can Save You Money
Disclaimer: “Viking Manufacturing is not a CPA or Tax Attorney, nor does it give professional investing advice. This article reflects feedback from our clients during their purchase process. For personalized investment or tax advice, please consult your own trusted CPA or Tax Attorney to verify your eligibility and confirm that your government permits the options discussed here.”
As we approach the end of the year, many businesses and individuals are looking for smart investments that not only serve their immediate needs but also provide long-term financial benefits. For those in need of durable, customizable, and cost-effective building solutions, steel buildings present a unique opportunity to make a wise investment that pays off now and well into the future. Whether you’re considering a metal warehouse building, commercial building, agricultural barn, or even a prefabricated steel structure for personal use, making the decision to purchase before year-end can result in significant savings.
In this blog, we’ll learn how investing in steel buildings before the end of the year can offer financial advantages, including potential tax benefits, reduced upfront costs, and a greater return on investment (ROI).
Why Steel Buildings Are a Smart Investment
Steel has long been recognized as one of the most versatile and reliable materials in the construction industry. Its inherent strength, durability, and resistance to harsh weather conditions make it an ideal choice for various applications, from industrial warehouses to residential garages. But beyond its practical benefits, steel buildings can be an exceptionally wise financial investment. Here’s why:
- Durability and Low Maintenance: Steel structures are built to last. Unlike wood or concrete, steel is resistant to pests, fire, and decay, meaning fewer repair costs and lower maintenance over the lifespan of the building. This translates into long-term savings.
- Customization and Flexibility: Steel buildings are fully customizable, allowing you to tailor the structure to meet your specific needs without incurring the high costs associated with traditional construction materials. This flexibility enables better space utilization and operational efficiency.
- Energy Efficiency: Many modern steel buildings are designed with energy efficiency in mind, offering insulation options that reduce heating and cooling costs, which is especially beneficial for large structures like metal warehouses.
- Faster Construction: Prefabricated steel buildings can be assembled much faster than traditional buildings, cutting down on labor costs and reducing downtime, so you can start using your building sooner and avoid costly delays.
Now that we’ve established why steel buildings make a great long-term investment, let’s dive into why year-end is the best time to act.
Tax Benefits of Purchasing Steel Buildings Before Year-End
One of the most compelling reasons to invest in a steel building before the year ends is the potential to take advantage of tax savings. Business owners, in particular, stand to benefit from tax incentives that can significantly reduce the overall cost of the structure. Here are a few ways you can maximize your tax savings:
Section 179 Deduction
The Section 179 tax deduction is a vital tool for businesses looking to write off the full purchase price of qualifying equipment or property purchased and put into service by the end of the year. Steel buildings, including metal warehouses, commercial buildings, and agricultural barns, typically qualify for Section 179 deductions as long as they are used for business purposes.
What is Section 179?
Section 179 allows businesses to deduct the full purchase price of qualifying equipment or property up to a certain limit from their gross income, rather than depreciating the asset over time. For 2024, the Section 179 deduction limit is set at $1.16 million, making it an excellent time to invest in a steel building if your business needs additional space or infrastructure.
How Does It Work?
If you purchase and install a steel warehouse or any other eligible structure before December 31st, you can claim the deduction on your 2024 tax return, lowering your taxable income and resulting in immediate savings. For example, if your steel building costs $500,000, you could deduct the entire amount, reducing your tax liability by potentially thousands of dollars.
Benefit:
By claiming the Section 179 deduction, businesses can recover a significant portion of their investment in steel buildings almost immediately, freeing up capital for other important initiatives.
Bonus Depreciation
In addition to Section 179, businesses can also benefit from bonus depreciation, another tax incentive aimed at encouraging investments in business property. In 2024, businesses can claim 80% bonus depreciation on qualifying property, including steel buildings, placed in service before year-end.
What is Bonus Depreciation?
Bonus depreciation allows businesses to deduct a large percentage of the cost of eligible property in the year it is purchased, with the remaining cost being depreciated over subsequent years. This incentive is especially beneficial for businesses that have exceeded the Section 179 deduction limit or prefer to spread out their tax savings over time.
How Does It Work?
For example, if you purchase a prefabricated steel building for $400,000 and place it into service before December 31st, you could deduct 80% of the cost ($320,000) in 2024 and depreciate the remaining 20% ($80,000) in future years. This upfront deduction reduces your taxable income for the year, providing substantial savings.
Benefit:
Bonus depreciation helps businesses reduce their tax burden and recoup the cost of their investment faster, improving cash flow and increasing the ROI of the steel building.
Locking in Lower Prices and Avoiding Price Increases
Another financial advantage of purchasing custom steel buildings before year-end is the opportunity to lock in current prices and avoid potential price increases. The cost of steel and other building materials is influenced by various factors, including supply chain disruptions, tariffs, and inflation. As demand for construction materials fluctuates, prices can rise unexpectedly.
Steel Prices:
In recent years, steel prices have seen volatility due to supply chain challenges and global market conditions. By investing in a steel warehouse or other structure now, you can secure your building at today’s prices, potentially saving thousands of dollars compared to future price hikes.
Inflation Concerns:
Inflation is another factor that can drive up construction costs. As inflation rates rise, the cost of materials and labor also increases. Investing in a metal warehouse building before inflation further affects prices can help protect your budget and ensure you’re getting the best deal possible.
Immediate ROI and Increased Property Value
Purchasing a steel building before year-end also allows you to start realizing a return on your investment sooner. Whether you plan to use your steel building for storage, manufacturing, or leasing purposes, the sooner it’s up and running, the sooner it can start generating income or improving your operational efficiency.
Increased Property Value
Steel buildings are a valuable asset that can significantly increase the value of your property. By adding a metal warehouse building or steel commercial structure to your property, you enhance its utility, making it more attractive to potential buyers or tenants. Additionally, steel buildings are known for their longevity, which means your property value will remain strong for years to come.
Income Generation
If you plan to lease out your steel warehouse or other structure, purchasing and installing it before year-end allows you to start generating rental income sooner. Commercial and industrial tenants often seek out steel buildings for their durability, low maintenance, and customizable designs, making them a desirable option for long-term leasing.
Operational Efficiency
For businesses using steel buildings for storage, manufacturing, or distribution, the sooner the structure is operational, the sooner you can benefit from improved efficiency and reduced overhead costs. Steel buildings can help streamline your operations by providing more organized and spacious environments, ultimately contributing to a higher ROI.
Financing and Incentive Programs
In addition to tax savings, many financing and incentive programs are available to help businesses and individuals invest in steel buildings before year-end. These programs can further reduce the upfront cost of your investment and make it more affordable to purchase a prefab metal warehouse or steel structure.
Financing Options
Many steel building manufacturers and suppliers offer financing options that allow you to spread out the cost of your investment over time. These financing plans often come with competitive interest rates, making it easier to budget for a steel warehouse or metal building without straining your finances.
Energy Efficiency Incentives
Depending on your location, you may be eligible for energy efficiency incentives or rebates when you invest in a steel building with energy-efficient features. These incentives can further reduce the overall cost of your investment while helping you lower your long-term energy bills.
Preparing for 2024: Future-Proofing Your Business
By investing in a steel building before year-end, you’re not only saving money now—you’re also preparing your business for the future. With the ongoing demand for adaptable, cost-effective building solutions, steel buildings offer a way to future-proof your operations and ensure your business is ready for whatever challenges or opportunities come your way.
Scalability and Flexibility
Steel buildings are easily expandable, making them ideal for businesses planning to grow or scale their operations. If you anticipate the need for additional space in the future, investing in a steel warehouse now ensures that you have a flexible, scalable solution in place.
Long-Term Sustainability
As sustainability becomes an increasingly important factor for businesses, steel buildings offer an eco-friendly solution. Steel is one of the most recyclable materials in the world, and many steel buildings are designed with energy-efficient features that reduce environmental impact and operational costs.
Act Now to Maximize Your Savings
Investing in Viking steel buildings before the year ends is a smart financial decision that can provide immediate tax benefits, protect against rising costs, and deliver long-term ROI. Whether you’re looking for a metal warehouse, commercial space, or a prefabricated steel structure, Viking Manufacturing is here to help you find the perfect solution.
Take advantage of the tax deductions, bonus depreciation, and cost savings available by purchasing your metal building before year-end. Contact Viking Manufacturing today for a free quote and see how we can help you save money while investing in a durable, versatile building that meets your needs.
Viking Metal Buildings
Whether for extra home storage, a new business office, or a farm barn, we design steel buildings to fit your exact requirements.
