Commercial and Multi-Family Property Buyers: What Will Your Building Costs Be Over the Next Five Years?
commercial building inspection - What are the expected costs going to be over the next five years for your multi-family or commercial real estate property?
It might include replacing or repairing electrical subpanels, HVAC units or a roof depending on what kind of condition the building is in. Predicting how much building repairs will cost requires a lot of experience in order to cover all the bases.
A inspector who is highly qualified and experienced at doing a commercial building inspection is probably one of the best people to answer this question for you. A lot of what affects the costs is the long list of industry standards. A second thing that has an effect on costs is the variance of contractors' rates from area to area. Additionally, there can be seasonal factors and related emergency situations that affect the costs. As an example of this, plywood costs went up over 100% following hurricane Katrina. This dramatic increase in price had a significant effect on roof repairs and replacement.
During the periods of time recently when oil prices rose rapidly, the roofing industry was also affected. In addition, the cost for the petroleum-based sealants for parking lots went up which affected any work that needed to be done for commercial building parking lots. It takes keeping your finger on the pulse of what is happening at the time, keeping up with industry standards and the local market to determine the costing for each aspect of a particular site.
Here is another scenario: The air conditioning unit on the roof is almost gone. In the next 5 years you'll have to replace it. From my experience I know that this size unit will cost about $5000 to replace (both removing the old one and installing the new one) - MOST OF THE TIME! I can look this up in a costing book and I can give this price to my client and my job as an inspector is done. That all sounds really good but it is not the whole truth. What kind of connectors are there from the unit to the ducting? Which type of ducting is in use? Ducting leaks? If the ducting has to be replaced - how difficult will that be? What is roof access like? In what city is the building located? (You have to get a special permit in Beverly Hills to use a crane.) Depending on the answers to these questions and more, the $5000 HVAC unit could end up costing more like $9000.
If you have possible roofing issues you will want someone with experience to give you suggestions since this can be one of the most costly areas of repair or maintenance. There are currently procedures used that can not only save up to 40% over replacement but can also reduce energy costs by keeping the interior of the building cooler, such as elastomeric material roofing. In some circumstances this method will more than pay for itself in 5 years or less. However, this method can’t be used in all circumstances.
Legislated requirements can also affect the costs. An example of this has to do with HVAC. The mandates on this type of equipment in California has had a noticeable effect on cost. This has resulted in a doubling of cost over the last few years for what contractor's directly pay for HVAC units. Also, the methods used to install some types of HVAC equipment require roof mounted ducting. This can significantly affect the cost of installation or replacements.
The best way for you to protect yourself and your investment from any major surprise expenses is getting a good commercial building inspection done by an inspector who knows all of this information including the requirements for your local area.