When making a decision to purchase a commercial investment property, a thorough condition assessment is essential. Unless you are thoroughly trained and educated in this part of real estate, I strongly recommend hiring a professional to perform this task. In addition, I suggest you take the time and walk through the property inspection with the firm that you hire and ask questions.
A baseline property condition assessment process is very detailed and thorough. It is customary practice, at least in the US, to conduct research and perform a walk-through survey evaluating the improvements located on a parcel of commercial real estate. The goal is to identify the physical deficiencies or material deferred maintenance of a property, its components and/or equipment. In addition to a walk-through inspection of a commercial investment property, document review and interviews are conducted as well. The interviews augment the walk-through survey to assist the consultant in understanding the property and identification of any physical deficiencies.
The work product resulting from completing the Property Condition Report incorporates the information obtained during the walk-through survey and includes opinions of probably costs for suggested remedies of the physical deficiencies identified. The Property Condition Assessment excludes deficiencies that may be remedied with routine maintenance, miscellaneous minor repairs and normal operating maintenance. It also excludes conditions that generally do not present a material physical deficiency to the subject what are property condition reports?.
Don’t just read the report as it is part of your “Due Diligence”. Get involved, and understand the process and what makes up a physical deficiency, which ones are more important and which ones could be a deal killer. You will get 10 times the amount of information out of a simple Property Condition Assessment by walking through the property with the consultant and communicating by asking well thought questions, then by just reviewing the end result which is the report.
I have conducted a number of independent Property Condition Assessments myself but typically we contract the services of a reputable firm to perform this task. However, I make sure I am present on each and every walk-through so I can understand the property as well. I can also enhance the reports by performing a separate independent report that covers issues that a typical Condition Assessment would not. I can get a lot better feeling of whether the building was taken care of just by looking at engineering logs, water treatment tests, equipment logs, etc.
If you want to learn more about buying investment property, make sure you do your homework first. You can certainly make a large amount of money by being patient and persistent and know the facts.