Nearly every church begins as a tenant leasing space—most doing portable church. With limited resources, leasing is the only option. The decision to purchase only becomes relevant should your church continue to grow and become more stable and more permanent. Then it might be time to settle down. It’s at this time that a church should consider purchasing its facility. Not only does this establishes the church as a permanent place in the community, but from a financial perspective, by purchasing, your church will eliminate the cost of property taxes, and eventually be able to pay off its loan to free up resources for more ministry and programming.
Red Rock Church Example. This is exactly what happened to Red Rocks Church in Golden, Colorado. According to Eric Parks, leader of Operations on the Directional Leadership Team, Red Rocks Church started their church in a leased space, but today they own all of their facilities. They initially chose to lease their facilities because they:
- Didn’t really have a choice—there was no cash to purchase!
- They didn’t know if they would succeed.
- Leasing allowed then to keep more of their revenue, allowing a quicker ramp up of the essential staff positions (Lead Pastor, Administrative Pastor, Children’s Director, Youth Pastor and Groups Pastor).
24/7 Facility a Requirement. While RRC needed a place where God’s word could be preached and people could be saved, they were not willing to go into a portable church scenario. Having a 24/7 facility (as opposed to renting a temporary facility like a school) was critical to reaching their audience. A 24/7 facility has much more credibility than a temporary facility (such as a school) scenario. A 24/7 facility says “we are permanent” and here to stay. You can be assured that after you get settled here and get to know people, we won’t go away!
When they decided to expand beyond one location and to go multi-site, they rented again! This was because they didn’t know if their expansion would work. Locking yourself into a big mortgage can be burdensome. They took a chance with a 5 year lease and negotiated for a series of 1 year options in case it proved successful. Further, they are mindful of the high personnel costs to staff a new campus which can reach as high as 70%. This leaves little room for investing in real estate.
Decision to Own. When RRC became a church of 6,000 people, they realized that people are counting on them and they need some longevity and they couldn’t risk getting thrown out of a building! This actually happened (getting thrown out) in their first facility in Heritage Square. Well, they didn’t actually get thrown out, but they are being forced to move because the owner is redeveloping the property. This is a good reason to own!
If you’re considering a church facility project, our Church Facility Solutions (CFS) team is here to serve you. CFS works with churches to create strategic facility expansion plans. We are a full-service commercial real estate development organization committed to serving churches. This vision aligns with our principals’ personal values as followers of Jesus Christ.
CFS provides A to Z services including strategic planning, financial feasibility, site or building selection, capital campaign, financing (as owner’s representative), project team selection, project and construction management (also as owner’s representative), furniture, fixtures, equipment, audio, visual, light procurement, and relocation coordination.
For more information on Church Facility Solutions, check out us out at https://churchfacilitysolutions.com or contact us at info@churchfacilitysolitions.com.