If you want to buy your school building someday, the most useful thing you can do today is start planning earlier than feels necessary. Buying, building, or moving takes longer than most leaders expect, and the schools that land in the right space usually gave themselves room to get there.
Why ownership appeals to school leaders
Owning your building can make your school a beacon of stability in your community. It also gives you autonomy over your facility, so you can make improvements and expand as your school grows.
Ownership brings its own work, too. Owners handle emergency heating, ventilation, and air conditioning (HVAC) repairs, periodic roof inspections, snow removal, landscaping, and major renovations every decade or so. Nonprofit schools also don’t see the tax benefits from owning real estate that for-profit owners do. Knowing this up front helps you decide whether buying, a long-term lease, or staying put fits your school best.
Start with your budget
Before you tour a single property, get your numbers. A realistic figure shapes every conversation you’ll have with architects, brokers, and renovation companies, and it keeps your project team on the same page from day one.
When a financial institution prequalifies a school, it looks at existing reserves, public subsidies, private donations, public or private foundation grants, operating revenue, and charter term. Lenders want to see that your charter has been renewed for the long term.
A helpful guardrail: over the longer term, investors are unlikely to finance a project that would require you to spend more than 20% of your operating revenue on rent or repaying debt. They want to see at least 80% of your revenue going back into instruction and your academic programs. For example, a school with $6 million in annual revenue that can safely set aside 15% (about $900,000 a year) may be able to budget around $9 million for a facility project. Your school’s situation will be different, but the example gives you a ballpark to start from.
Location matters as well. Most states fund schools with a per-student formula, so a school in a high-cost city will have a harder time affording a building than a school with similar enrollment in a town where land costs less.
Give your school building purchase more time than you think
Plan at least a year ahead. Any building project means moving staff, students, furniture, and equipment, and it will likely take longer and cost more than the first estimate. Look at how long similar projects have taken, build in flexibility, and time your move so it disrupts learning as little as possible.
The Money to Buy Your School timelines give you a sense of scale. Staying in your current space under a lease averages six to seven months. Moving to a new forever home averages nine to 11 months. Building a forever home averages 13 months or more.
The Buy Your School guide breaks a facility project into five stages: plan, fund, acquire, design, and construct. Planning covers space programming, features, budget, timeline, and charter approvals. Acquiring a site can involve requirements and restrictions, use permits, and land prep. Design brings in team selection, general contractor bidding, and building permits, along with a choice between one big move or a phased approach.
Get your school ready now
You can start preparing long before you’re ready to buy. Conduct a building audit each year to see how well your current facility meets your needs. Think about future costs, including maintenance, energy efficiency, and your growth plans. Review your lease agreements and other contracts so you know when they expire.
Then sketch out your ideal space. Go back to your mission and ask what your building has to include to carry it out. How many classrooms will you need? How many bathrooms? How much hallway and office space? If you serve students who use mobility devices, or your programs depend on science labs or a performance space, put those needs on the list early.
If the numbers are tight, you have options. Phasing construction or renovation can help you manage costs, and renting out unused space or repurposing existing facilities can bring in funds.
Know what lenders and landlords look for
Whether you pursue a bank loan, a bond, or a lease, the people financing your project will focus on four things. They’ll want to see sustainable enrollment, backed by current numbers, a waitlist, and demand in your local market. They’ll look for experienced leadership and academic performance that holds up against nearby schools, your district, and your state. They’ll review your financials to make sure you can make payments while still funding a quality academic program. They’ll also look at governance, including your relationship with your authorizer and an active board that provides strong oversight.
Getting these pieces in order ahead of time makes the approval process smoother, whichever path you choose.
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