A large investment is required to buy a commercial property. A Portfolio Manager can order a building inspection report and report before a purchase is made. This provides all the information necessary to make an informed decision about the property.
A commercial building inspection can reveal a property’s true condition and the cost to fix it. What will a commercial inspector look for in a property? Continue reading to learn about building inspection basics and the four things that an inspector will make sure to inspect.
The basics of commercial building inspections
A commercial building inspector will inspect a building from roof to foundation. Before the building inspection process, let’s first review some basics.
What is a commercial building?
A commercial building is any structure or building located on commercial real estate. These buildings can generate income from rental income or capital gains. Commercial buildings can be divided into five types: Office Buildings (Retail/Restaurant), Multifamily Dwellings (Multifamily Dwellings), Land, and Miscellaneous.
Who inspects commercial buildings?
When it comes to the hiring of a commercial building inspector, asset managers have many options. First, you can hire an engineer or an architect. These people have diverse backgrounds in building trades, maintenance, and facilities management. It is important to remember that architects and engineers may charge higher fees for their specialized knowledge and services.
Another option is to hire commercial building inspectors. Many companies specialize in both commercial and residential inspections. But be cautious. A Commercial Inspection in Lithia FL is different from a residential inspection. It is smart to hire a company specializing in commercial inspections. They also need to understand that commercial properties can be a business asset, business expense, and income generator.
What’s the purpose of a commercial building inspection
The key factors in commercial real estate acquisitions are the return on investment (ROI) and residual value. Portfolio managers need to know two things “How much is this going to cost?” and “How much can I make from this investment?”
An inspection is a great way to find out. Inspections will show the lifespan of five main systems in the building. This includes the following:
- Structural Integrity
- Heating, Ventilation and Air Conditioning (HVAC).
Real estate management teams need to know whether the roof or HVAC system needs to be replaced or upgraded because of a change in building usage. A building inspection can answer these questions. The report will help the portfolio company decide if the property is worth buying.
Four Things A Commercial Building Inspector Will Look For
Commercial property purchase is expensive. It also requires extensive research and consideration before making a decision. Investors, portfolio lenders, and lenders of commercial mortgage-backed securities (CMBS), routinely order property conditions (PCAs) to find out more about a property or to enter into a purchase agreement.
These are the four main areas a commercial inspector will focus on during an inspection.
Five Major Systems of the Building
Commercial buildings generally have five major systems: Electrical, Mechanical, Heating, Plumbing and Air Conditioning/Ventilation. Inspectors will check these systems to ensure that they are in good condition. Inspectors will determine the cost of repairs or replacement if a system isn’t in good condition. During the inspection, fire safety systems, sprinkler systems and building alarms will all be checked.
The Exterior of the Building
The exterior of a building doesn’t only include the walls but also parking lots and structures, landscaping, and roofing. The inspector will assess the structural integrity of the building and determine the cost of repairs. To fully inspect a building’s exterior health, inspectors can use the expertise of roofing contractors, building code inspectors or construction contractors.
Interior Design of the Building
This inspection is used to verify that the interior spaces comply with local building codes. It also checks for safety-related hazards. The inspector will inspect the building’s walls, floors, bathrooms and kitchen areas. This inspection will highlight any interior renovations that may be required, especially if the building is not up-to-code.
Documentation for the Building
During an inspection of a commercial building, inspectors may review many documents. They might review building plans, citations and certificates of occupancy. These records will help investors determine the property’s value and reveal the true cost of owning the building.