You have the funds, and you’re all too eager to invest in some commercial property. However, before dishing out such a large sum of money, as a real estate investor, you really need to ascertain the condition of the property in question and what it would take to make repairs. Presented in this article, is a brief commercial property purchase checklist that’ll help you determine what shape your investment is in.
Until and unless you’ve properly researched the commercial property, you shouldn’t jump the gun and enter a purchase agreement. Purchasing commercial property is a rather costly proposition that requires careful consideration. Be sure to incorporate this checklist.
What’s on the Outside?
A commercial assessment is necessary for determining if the building is in good shape structure-wise and what the cost-estimate would be, in the event “touch ups” or more extensive repair work is needed. Exterior areas typically include landscaping, the roof, parking as well as the building foundation and structure. Hire an inspector who has access to experts in the form of building code specialists, as well as roofing and construction contractors. When it all comes together you’re going to have a good idea of where your property stands, literally!
A commercial building inspection in this case typically includes the heating, mechanical, electrical, plumbing, ventilation systems and air conditioning. It’s the inspector’s job to ensure all systems are in good working order. If one of the systems is not up to standard, an inspection report will clearly state what needs to be replaced or repaired and the total cost. A commercial building inspection includes looking at the building alarms and sprinkler systems in addition to fire safety systems and security systems. Whether you’re taking advantage of commercial mortgages or not, you need to make sure all of this is in good working order as your investment must be protected in the long run.
Take a Peek
An interior inspector provides you with information on renovations or how much it would take to make interiors look more current and presentable. Inspections will determine if there are any safety issues that may arise. There are certain local building codes the interior spaces must meet. Interior elements such as the floors, bathrooms, offices, walls and kitchen facilities, among others, are evaluated for safety and living standards.
Commercial building inspectors are also tasked with reviewing documents like certificates of occupancy, building plans, appraisals, construction permits, citations, surveys, maintenance records, environmental studies, floor plans and evacuation plans. The Document Review includes the emergency and fire safety system records – test documents, fire detection maintenance, inspection reports, fire extinguisher service documents and fire door inspection. Documents for an apartment complex pertain to rent records and inspection reports from local code enforcement.
It’s always good practice to take a look at past utility and tax bills before signing a purchase agreement. When determining an accurate value of the commercial property and going over your commercial property purchase checklist, do take elements like historical expenses and renovation/repair costs into account.