Remote Work

How Much Do Coworking Spaces Cost

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 9 minute read

Coworking spaces are emerging as a practical substitute for working from home or a conventional office, thanks to the rise of telecommuting and independent contracting. 

Sharing an office space might be more expensive than you think, despite the fact that it has many benefits such as improved social contact, access to conference rooms, and the chance to develop a better work-life balance.

To avoid unpleasant surprises, calculate all of the costs associated with making the change to coworking.

What Is Coworking?

Individuals and (sometimes) small enterprises share office space in what is known as “coworking.” Subletting desks and offices is sometimes a fairly casual arrangement made by a business owner who owns or leases an office space that is too large for their needs.

In addition to serving as informal communities for freelancers, telecommuters, and business travelers, coworking spaces also function as legitimate enterprises. Some shared office spaces operate on a membership basis, allowing members access to the shared office and all of its benefits, while others charge a daily, weekly, or monthly rate for usage of the shared office space.

Unlike traditional office buildings, coworking spaces don’t often need members to sign annual leases.

As with any workplace, the layout of a coworking space might vary. Many shared office spaces (or “coworking spaces”) allow members to hire desks on a first-come, first-served basis, meaning that employees may just show up to work each day with their laptops and take a seat wherever there happens to be an open desk.

In more traditional workplaces, employees may be given private offices or workstations. Both private offices and more open layouts may be accessible, depending on the design of the building.

Some owners of coworking spaces go above and beyond simply providing shared office space and amenities by hosting networking events and “getting to know you” websites where members may formally introduce themselves to one another and begin building professional relationships.

Why should you cowork?

Some people choose to work from home, while others prefer to rent and travel to a coworking office each day. For the following reasons:

  1. Reduced Stress

When you have a physical workplace, it’s much simpler to end your workday. Working from home might be difficult if you don’t have a dedicated office space or a quiet area to focus on your job.

When working from home, some people may feel obligated to work constantly, even if they aren’t getting much done. This makes it harder to unwind and may cause stress in the home.

  1. Better Time Management

Distractions abound in the form of children, animals, neighbors, delivery men, electronics, food, and literature. It can be challenging to keep distractions to a minimum during the workday, which might stretch an eight-hour shift into a twelve- or fourteen-hour one.

  1. Increased Social Interaction

While this isn’t crucial for everyone, there are many who value the opportunity to network outside of the office.

  1. Opportunities for Networking

People you work with may make excellent clients or referrals.

  1. A Professional Environment

Telecommuters and independent contractors can avoid the distractions of seeing customers at home or in noisy coffee shops by using a coworking space.

  1. Low Upkeep

Offices and shared resources are typically maintained by the coworking space’s management or owners.

  1. Private office rental is less expensive and less risky.

Costs may add up quickly when it comes to renting an office space, especially in a major metropolitan area. Costs associated with maintaining an office space, including rent, furniture, equipment, utilities, cleaning, and repairs, are often substantial.

In addition, a large proportion of commercial landlords demand multi-year commitments from their renters. Rent must be paid even if the tenant has a negative cash flow, is out of town on business, or otherwise does not use the premises. The shared costs of electricity, Internet, and office equipment in a coworking space are spread out among the participants.

Hidden Costs of Coworking

It’s crucial to be aware of the less-than-obvious expenses of working in a shared space, even while coworking may be a handy and cost-effective option to working from home or hiring a commercial office.

Some of these expenses may come as a surprise to those who have been working from home, but they may not be so surprising to those who are accustomed to working in a conventional office.

  1. Commuting

Unless you can go to your coworking location by foot, you’ll need to factor in the cost of transportation. Some examples are the price of gasoline, car repairs, and public transportation fees.

Travel time to and from work is time spent that is not compensated. It’s also possible to incur parking costs, depending on the amenities offered by your coworking space.

  1. Child and Animal Care

There may be costs associated with hiring a sitter for your kids or caring for your pets if you need to spend the day away from home working.

  1. Food and Drink

When working from home, you have the convenience of a fully stocked kitchen, with a coffee machine and refrigerator. If you have a job that requires you to be away from home during the day, but you don’t want to cook a meal every day, you may either buy microwavable meals to keep in the office fridge or spend money at nearby eateries.

Another challenge is maintaining enough caffeine levels: The allure of the local Starbucks or independent roaster may tempt you to leave your desk more often than you’d want, even if your coworking space provides basic coffee and hot water for tea. The expense of all those cappuccinos will shortly mount up.

  1. Socializing

Even if you bring your lunch to work every day and drink just coffee from the K-cup machine, your coworkers may still invite you out for meals or beverages during breaks or after hours. 

Turning down these invitations might not be a big deal if you’re the reclusive kind or if networking isn’t a priority for you. Social butterflies, feel free to adjust your fun spending to include these opportunities to mingle.

  1. Storage

Members who aren’t able to commit to a desk on a permanent basis may be able to rent storage lockers at some coworking locations. Locker rental is convenient since it eliminates the need to transport your computer and other belongings every night. However, rent is an extra cost to consider.

  1. Technology and Electronics

Expect to bring your own laptop as most coworking venues do not provide access to computers. Bring your preferred accessories, such as a big monitor, ergonomic keyboard, or trackball, along with your laptop. It’s possible that you could bring these goods to and from work every day, and it’s also possible that you could forget to bring them with you at some point.

  1. Services for the Office

Some shared offices are better than others for getting work done. The usage of the shared office copier, printer, and fax machine may or may not incur a fee at some establishments. 

The cost of WiFi may be included into the rent at certain workplaces, while at others you may need to pay extra or even provide your own hotspot for safety concerns. Before signing a lease, be sure you understand what is and is not included in your rent.

  1. Office Equipment

Remember that you’ll need to supply your own basic office equipment, such as pens, envelopes, staplers, and paperclips.

  1. Clothing

Due to the nature of coworking spaces, you can no longer get work done while wearing your jammies and with your hair in a tangled mess. Although most workplaces don’t have a strict dress code, employees are nonetheless expected to look neat and put together at all times. 

Furthermore, braving the weather on your way to and from work may be rough on your wardrobe. Once you join a coworking space, you’ll likely find yourself spending more money on things like new clothes and personal care products.

  1. Sniffles Treatment

Everyone who has ever worked in an office has a less-than-fond memory of when a virus swept through and made everyone sick. The germs in a shared office are real, so get your immune system ready for a test.

  1. Taxes

Rent or membership payments to a coworking space may be tax deductible, but so would the costs of setting up shop in your own home. Find out if and how much moving to a coworking space may impact your tax obligations by consulting with your tax professional.

  1. Insurance

Find out if you, your clients, or your guests are covered in the event of an accident by reviewing the insurance information provided in your lease or membership agreement. If it doesn’t, you should consult an insurance professional about what other choices may be available to you.

Because of the gravity of the situation, you may wish to consult with an attorney about the office’s insurance policy.

  1. Theft

Since members of a coworking space can come and go at will with little to no oversight, the facility’s security is often inadequate. The security of your work and belongings is compromised as a result of this.

Cost-cutting measures

Coworking spaces are expensive to set up, but many individuals believe the benefits are worth the cost. You may cut costs in several ways if you opt to join a coworking arrangement, including:

  1. Pay Your Rent or Membership in Advance

Prepayment reductions are offered by several shared office spaces to members or tenants. If you want to know if this is feasible, talk to the management of the facility. If so, make sure to get a documented refund policy in place before you leave town or head back to your home office.

  1. Consider Options Other Than Monthly Rent

Keep in mind that the true expense of a coworking space goes beyond the rent or membership fees. Find out the specifics of your coworking membership, such as what is included and what is an additional cost. Then, and only then, should you do the math.

  1. Location, Location, Location

A coworking space near your house is ideal. The convenience of being able to dash home for lunch and the lack of needing to spend time in traffic are two of the many benefits of working close to home. If there aren’t any offices in your immediate area, try to find one that’s in close proximity to places you frequent, such as stores, banks, gyms, or other places of interest.

An office close to the airport is convenient if you spend a lot of time traveling or meeting with clients from out of town. Things like parking availability and proximity to public transportation should also be taken into account. Accessibility should be a top priority when selecting an office because time equals money, especially if you’re a freelancer.

  1. On-site Lunch and Snack Food Storage

Maintain a stock of frozen dinners, microwavable soups, and sandwich fixings if the shared office you work at has a kitchen. To save money on lunches, it’s a good idea to buy a big food storage container, label it with your name using a permanent marker, and stock it with sandwich wraps, cold cuts, and cheeses.

You’ll be less tempted to order takeout or have meals delivered if you stock up on these staples.

  1. Profit from Coffeehouse and Restaurant Promotions

When possible, you should always choose the cheaper option. Ask around at local establishments for their lunch menus, since many of them have really affordable lunch specials.

You may save money at several cafes if you use your own cup or thermos. Also, inquire about loyalty punch card programs at the places you frequent most.

  1. Make Public Transportation Useful

Use the time in the car to study for work or check your work email if you don’t feel car sick. If you can’t learn anything by reading on the way to work, consider listening to podcasts about your field instead.

  1. Investigate Commuter Tax Breaks

Check with your human resources department to see whether your firm has a commuter tax benefits program that would allow you to deduct the cost of your public transportation pass from your paycheck before taxes are taken out. Many people report saving hundreds of dollars annually using these tools.

  1. Examine Your Transit Pass Options

Be sure to tally up how much you spend on transportation costs every month. Examine the various fare structures offered by the public transportation service you are using to determine which one best suits your needs.

  1. Deals Should Be Negotiated With Local Businesses

Merchants in the area may be prepared to give discounts to your coworking space’s clientele if they are made aware of it. Get in touch with the coworking space’s management and see if he or she can negotiate any discounts for you and your fellow workers at nearby establishments.

Bottom Line

For freelancers and telecommuters who prefer not to work from home, the advent of technology has made shared office spaces like coworking hubs a viable option. While the benefits of coworking are undeniable, it is vital to remember that there are costs beyond those you might be used to paying.

Before opting to join a coworking space, it’s smart and necessary to account for these costs in your financial plan.

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