The Value of the Commercial Property Inspection Cost
Apr 10, 2018 // By:Scott Hamele // 2 comments
Property Condition Assessment –Low Cost, High Reward
When buying a commercial property, having a Property Condition Assessment (PCA) done can be a great way to achieve peace of mind. The PCA can help determine if the prospective property will be profitable. It is very easy to want to skip this step to save a few dollars. The commercial property inspection cost is a small factor when considering the overall importance of real estate investing. In some cases, car buyers spend more time and effort researching a vehicle than investors do for a commercial building.
If you were to analyze the return on investment (ROI) of a Property Condition Assessment like you would any other asset, you would be stunned. In fact, the ROI is probably the highest you will ever encounter in any investment. As explained in last month’s article, a PCA was ordered on a $1.75M building that was under contract. The results of the report detailed $235k worth of repairs were required. Consequently, the purchase price was renegotiated and lowered by $115k. This saved the buyer 6.6% off the original contract amount. The PCA cost was $5,000. The ROI was 2300%. Yes that’s right, 2300%. Low cost, high reward!
You could argue that the buyer will still need to pay for the required repairs once purchased. However, the buyer now has $115k to spend on the property due to the results of the PCA and renegotiation of the purchase price.
Nationwide Commercial Inspections, LLC (NCI) standard PCA is based on the ASTM E-2018.The ASTM E-2018 standard provides guidelines for conducting a baseline commercial PCA and completing a property condition report (PCR). The goal of the PCA is to identify and communicate to the extent feasible the physical deficiencies of the property to the client.
What the Commercial Property Inspection Cost Includes
- Document review, research and interviews of appropriate individuals to assist in understanding a property and any physical deficiencies.
- A walk-through survey, as defined in the ASTM standards.
- Preparation of opinions and probable costs to remedy the physical deficiencies.
- Opinions of probable cost that are individually or in the aggregate less than $3,000 for like items are omitted. More than four separate items that collectively total over $10,000 are included.
- A property condition report per ASTM standards incorporates the information obtained during the walk-through survey, the document review, interviews and opinions of probable cost.
The commercial property inspection cost is negligible considering what is at stake. Do the right thing and order a PCA and protect your commercial investment.
About Nationwide Commercial Inspections, LLC
Nationwide Commercial Inspections, LLC utilizes their architectural, engineering and construction expertise to create and develop high quality property condition assessments. These commercial building inspection reports are customized for each type of real estate: office, retail, flex-space, industrial, hospitality and healthcare. If you are interested in protecting your real estate investment, contact NCI at 913-667-7774or visit our website at www.nwc-i.com.
Click here for a VIDEO about the Property Condition Assessments we provide.