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. In a recent inspection, 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!