A commercial inspection means getting your commercial property examined by a team of certified professionals to perform a several-point evaluation of the property, including its structure, landscaping, etc. The evaluation is crucial for a lot of purposes, such as buying and selling of the property, as well as for regular maintenance and record keeping.
In this commercial building inspection guide, we are going to cover in detail everything related to the inspection of a commercial property, who needs it the most, and even what a commercial property actually is.
What is a Commercial Property?
Commercial property can be defined as a property whose primary function is to generate income through conducting businesses of several sorts. It can be a building or even just a piece of land designated for a commercial activity. Examples include shopping plazas, parking lots, restaurants, corporate office spaces, etc. Generally speaking, a commercial property can be categorised into 1 of the 5 major types, including:
- Corporate offices (coworking spaces, corporate buildings, etc.)
- Retail / hospitality sector (shopping malls, restaurants, cafes, etc.)
- Multi-family residences (condos, rental buildings, flats, etc.)
- Commercial land (parking lots, farms, etc.)
- Others (sports facilities, warehouses, etc.)
The intended purpose of these properties affects how different taxes and laws apply to them.
What is included in a commercial inspection?
A commercial inspection is the evaluation of a real estate’s current condition in order to map out all of the underlying risks associated with it. Property buyers and investors need it to assess the possible additional expenses they will have to put up with apart from the purchase price, before they can start using it to generate revenue. Their primary focus is on two core concerns:
- How much will they need to spend in total, including the property’s price tag and repair expenses?
- What is the expected return on investment from that property?
This commercial building assessment checklist includes the five major components of a commercial property that need to be examined thoroughly for a professional to finalize their inspection report:
- The condition of the roofing
- Structural integrity of the building
- Evaluation of electrical components
- Plumbing system inspection
- Heating, ventilation, and cooling (HVAC)
Having an accurate idea of the remaining lifespan and necessary repairs of all of these components provides the investors with a measured estimate of the total expenses. This way, they can carefully assess their expected ROI from the property.
Who Needs a Commercial Inspection?
Commercial inspection of a property is a necessary procedure that serves beneficial purposes for several individuals. Apart from the usual pre-purchase protocol, it can also be done as part of a routine maintenance program and necessary record-keeping. Here are some of the major types of individuals that are most likely to need commercial inspection services:
- Property Buyers: Interested in mapping out the current state and condition of the real estate before making a purchase.
- Property Sellers: Looking to get an estimate of the true value of their property before putting a sale price tag on it.
- Property Owners: Owners who are not interested in selling but still want a comprehensive report in order to perform necessary repairs, maintenance, and also for record-keeping purposes.
- Portfolio Managers: Professionals who explore investment opportunities and perform risk assessments for large real estate investment firms.
Who Conducts Professional Commercial Property Inspections?
There are two major types of professionals that property buyers, sellers, or portfolio managers choose to perform inspections on the intended commercial property. They are:
- Engineers and Architects
- Licensed Property Inspectors
Engineers and Architects
These are the professionals who are the most nuanced in recognizing deficiencies in building structure and the associated components. However, being more senior in the field and placed at the top of the professional hierarchy, they often tend to charge more for their services.
This premium service fee is one drawback for many small-scale operators who may not be able to afford it. Hence, they turn toward the second, more economical option, which is the licensed inspectors.
Licensed Property Inspectors
You can avail the services of a licensed inspector through a company specializing in commercial property inspections. Make sure to choose the one that carries a lot of experience in the field, as commercial properties are sensitive assets that produce income but also require a lot of continued expenses as well.
Hence, it is necessary to go for the service that you can trust to provide you with an honest and clear report on whether the property is actually worth your investment or not.
Detailed Steps in Commercial Building Inspection
A comprehensive commercial building inspection involves a thorough evaluation of the four major components associated with it. They include:
- Building’s Systems/Utilities: Five major systems, including electrical, heating, air conditioning, plumbing, and ventilation.
- Building’s Exterior: Complete profiling of outside walls of the building, its foundation, roofing, and all associated areas, including parking lots.
- Building’s Interior: Inspection of the inside walls, ceilings, floors, and office spaces to ensure that they are hazard-free and comply with local safety regulations.
- Building’s Documentation: A thorough evaluation of the property’s appraisals, building plans, certifications, and emergency evacuation plans to make sure that all of it is in perfect working order.
The following stepwise process provides a comprehensive commercial inspection overview:
Step 1. The planning and preparation phase
Before starting the inspection, the licensed inspector gathers all the necessary information related to that specific building, including its floor plan, previous inspection reports, permits, etc. It helps them finalize the complete checklist necessary for the evaluation.
Step 2. Inspecting the exterior
The process typically starts from the building’s exterior, where the inspector takes a walk and actively looks for the signs of damage or wear. Their main focus is on the roof, siding, foundation, and windows. After that, they move to inspect the integrity of the drainage system.
Step 3. Moving to the interior
Each room and space is carefully examined to ensure local safety code compliance. Ceiling, floor, and walls are checked for leak damage and for other hazards such as mold.
Step 4. Assessment of the Major Utilities
All core systems of the building, i.e., Electrical, plumbing, heating, ventilation, and air conditioning, are checked, and an accurate evaluation of their integrity, lifespan, and necessary repairs is made.
Step 5. The final documentation
Once all the steps in commercial building inspection are complete, the relevant findings are compiled in a final report or document called the property condition report (PCR). It is the official document handed over to you by the commercial property inspector, and it carries all of the inspection findings in the form of clearly written notes, along with clear pictures of the findings as evidence.
Conclusion:
For buyers and investors, getting a commercial inspection proves beneficial in getting accurate estimates of the total costs and the expected ROI. On the other hand, owners often choose to get their properties inspected because of maintenance reasons and for accurate record keeping. Also, knowing the true worth of your property and pricing it accordingly can save you from unwanted legal repercussions in the future. You can contact trusted providers, like Sabreezz Home Inspection, to avail reliable commercial inspection services for your property.
