Now that you’ve signed a commercial property contract, it’s time to begin the due diligence process. This is sometimes referred to as the inspection period and typically lasts between 30 and 45 days until the purchase is finalized. During this time, you must conduct a home inspection of the property to ensure it meets your expectations and is a worthwhile investment. Here are the surprising advantages of doing so:
Cost Estimation
Inspections are an essential part of the process for assessing the financial returns of an investment property. It will provide a breakdown of the estimated costs for repairing and improving the property and a timeline for when these costs will need to be paid. Future homeowners should use this information to inform the expected returns from the investment and plan for current and future expenses.
Negotiation Advantages
You should never pay the full cost for a property that isn’t in good condition. Home inspections can help you negotiate a lower price or concessions from the seller. Buyers get huge discounts due to this process, and sellers agree to make repairs based on what the PCA has identified. Using a legitimate provider with professional authority and expertise is important to get the best possible negotiation.
Physical Deficiencies
Inspections should account for all potential issues a property might face, regardless of size. Ignoring minor problems may cause them to snowball into larger, more expensive ones. Property owners should not assume that buildings require no maintenance and all the money generated by the property should not be spent elsewhere. This can lead to a property becoming dilapidated, creating more costly repairs in the long run.
Owning a commercial property requires regular upkeep to keep it in good condition. It is important to dedicate 20% of the profits from the property to maintain it or to save up for future maintenance and improvements. Without proper funding, the property will show signs of wear and tear.
A home inspection can uncover problems with a property that can lead to costly repairs, such as structural damage, code violations, bad materials, poor craftsmanship, and inefficient systems, which can reduce the property’s lifespan.
Protection from Future Liabilities
A professional inspection can help you avoid expensive and damaging liabilities by unearthing potential safety risks. Moreover, if no hazard is found, the inspection shows that you could not have reasonably foreseen any resulting harm. This provides you with an expert witness for any future injury or accident.
Technical Understanding
Home inspections are a great tool for understanding property functions and making a well-informed buying decision. It can give you an insight into the particular features of the property that are important to you without having to visit the property. This can help you identify any potential risks associated with the property and understand the technical aspects of it that could affect its future use.
The information can also help you decide whether to go ahead with the purchase or if it would be best to walk away.
In Summary
A home inspection helps you determine the condition of a property, the costs of any necessary repairs, and the potential risks associated with buying the property. Future homeowners can then use this information to make a more informed decision when purchasing a property, refine future cash flow projections, or negotiate a more favorable contract price.
Contact AEI Inspections to Enjoy These Advantages
Our team has 30 years of experience conducting structural engineering and home inspection to troubleshoot all residential property components and systems. Schedule your inspection by calling (918) 251-6910 or filling out a contact form on our website!
