Tips for First Time Commercial Property Buyers
Many first-time commercial real estate investors enjoy the look and feel of an older building. They enjoy that the building has more architectural character and some history behind it. Unfortunately, when purchasing an older commercial building there are some updates that must be made to make the building safer, bring it up to code, and more comfortable. Whatever the case, it is important to know what decisions will need to be made as early in the buying process as possible. Here are a few things to consider when buying an older commercial property.
Does the Building Need to be Seismic Retrofit?
The requirements for how buildings are constructed to withstand seismic activity have changed significantly over the years. Depending on the era the property was built in, it may need a seismic retrofit to make sure it can hold up against a shift in soil or any other ground motion that occurs during an earthquake. A seismic retrofit is a significant modification to the structure of the building and is not something that should be considered lightly.
Heating and Cooling
The heating and cooling system of the building is also important. Older buildings often have an older furnace and air conditioning system. Those older systems may no longer be up to code or are no longer cost efficient. This may require major HVAC repairs to make sure the building is adequately ventilated, heated in the winter and cooled in the summer. Even with older furnaces, some owners decide to install a new energy efficient furnace in order to keep down cost of heating the building.
All of these reasons are buyers make sure to explore the HVAC system with a trusted heating and cooling company as early in the buying process as possible. Even if the building needs major HVAC repairs you may still decide to buy it, as these repairs are usually a one-time investment. However, knowing how much will need to be invested to fix your HVAC means that you can go into the buying process with open eyes.
Will it Need Electrical Work
Having safe and up to code electrical work is important. Older buildings often do not have up to date wiring, breaker boxes, or sockets installed. While shopping buildings, take a moment to look at those items. You may even want to take your own licensed electrician with you so that they can give you an estimate of how much work needs to be done to bring the building up to code. Sometimes this is a major repair that may lead to other repairs having to be done. If the building has to be rewired, the walls, floors, and ceilings may undergo construction. Depending on the building and the extent of the work you may decide to look at other properties.
Check Out the Water Heater
Older water heaters were built to last. Many old buildings still have their original water heaters that are still in working condition. However many older water heaters have been found to no longer be energy efficient. If they are slower to heat that means higher monthly water and heating costs. Having an up to date energy-efficient water heating system can save money in the long run. Even if that is not a repair you will undertake before occupying the building. you want to know if you will need to do this repair somewhere down the road.
Enjoy the Process and Don’t Be Intimidated
Buying your first commercial property can stressful. You may be working with a realtor and he may be saying terms like seismic retrofit and HVAC repairs. If you know what those terms mean, you may be seeing dollar signs. If you don’t know what those terms mean you may be seeing a jumble of question marks. Either way, remember to enjoy the process. Try to remember that this a good thing in your life and there are companies and services out there to handle whatever issue you may come across.
