Should You Do Commercial Inspections?
Perhaps you have been doing home inspections for a long time and are looking to try something new. Have you ever thought about commercial inspections?
Likely you have seen many offices or shopping centers under construction. Who inspects those? It could be you!
There are not many people who perform commercial inspections, far fewer than those who do home inspections. Learning how to inspect a variety of buildings could bring diversity to your work and be very profitable.
Let’s talk about the basics of commercial inspections. What do they include? Who hires commercial inspectors? What does it take to become qualified as a commercial inspector? Is it worth it?
What is a Commercial Inspection?
Just as a residential building has all of its components reviewed during an inspection, the same is done for a commercial building. A commercial inspection is a review of the building’s condition.
Unlike a residential building whose purpose is to provide a living space for people, a commercial building is a structure whose purpose is to generate profit. Occasionally these coincide, such as in a dwelling unit. The owner provides a living space and generates income from occupants.
There are generally eight categories of commercial properties:
- Multi-dwelling units – includes apartment buildings, townhomes, & condominiums
- Retail – includes malls, stores, & shopping centers
- Restaurants – similar to retail but includes a kitchen with commercial appliances
- Industrial – includes warehouses & manufacturing facilities
- Office – includes office suites/buildings & medical/dental offices
- Hotel & lodging – similar to multi-dwelling units but designed for temporary residence
- Luxury home or estate – because of being designed with commercial features such as commercial appliances, large square footage, and multiple HVAC systems, these are often classified as commercial inspections rather than residential
- Special Purpose/Miscellaneous – includes airports, churches, schools, & casinos
As mentioned earlier, the purpose of a commercial inspection is to review all the major components of the building. The inspector’s client, often a commercial investor, can then take that information and use it in negotiations on the purchase. It will help make decisions on what components need repairs or replacement.
What Happens During the Inspection?
The commercial inspection will be done by the inspector and their team. The inspector may have subcontractors who specialize in certain building components. Also, if there is a building maintenance team, they may participate in the inspection.
The inspector will follow the industry-accepted guidelines for commercial inspections or the International Standards of Practice for Inspecting Commercial Properties (ComSOP). InterNACHI and Certified Commercial Property Inspectors Association (CCPIA) developed these standards.
A visual inspection will be done on the property. The inspector looks for any issues with components such as:
- Safety & accessibility
- Roof surface & drainage
- Kitchen appliances
- Foundation, basement, & crawlspace
- Deck, balconies, & exterior elements
- Parking lots & sidewalks
The inspector will review documents and records related to the property’s construction and maintenance. Included may be documents related to lease agreements, blueprints, Certificates of Occupancy, and code violations. The inspector may also interview people who are most acquainted with the building to find out its history.
After the inspection has been completed, the inspector will provide the client with a report. This report will give detailed information on the findings of the inspection and help the client get a true picture of the property’s condition.
Who Hires Commercial Inspectors?
The main clients who hire commercial inspectors are businesspeople and investors. They are either wanting to purchase or invest in the property being inspected. Their main concern is whether or not the property can maintain a solid stream of revenue.
Remember, though, that it is not up to the inspector to determine the worth of the commercial property. Just as in a residential inspection, this is the job of an appraiser. The commercial inspector is just reporting on the condition of the property to help the client see its potential for income.
What Is the Pricing for Commercial Inspections?
There are three typical pricing methods for commercial inspections:
- Price per square foot – average range from $0.08 to $.30 per square foot
- Flat fee – common when an inspector has similar projects or consistent type of projects
- Percentage of sales price – common in very large projects; inspector receives percentage of property sale (perhaps 1% or 2%)
Commercial inspections require more planning, as the scope of work is greater and more complex. Usually, before an inspection is scheduled, proposals are submitted to the client with the scope of work and pricing.
Can Home Inspectors Conduct Commercial Inspections?
A home inspector can technically conduct commercial inspections. But it’s very important to first obtain additional skills and training on how to conduct commercial inspections. This will ensure the inspection goes smoothly and that the client is happy with the level of professionalism. Even though commercial inspections have similarities to home inspections, commercial inspections are bigger and have more sophisticated systems.
InterNACHI has some great resources to begin learning about commercial inspections. They have a free course for their members on best practices in this field.
Some other helpful advice is to take continuing education courses annually and be supervised by an experienced commercial inspector when you first begin to inspect commercial buildings.
Should You Do Commercial Inspections?
Commercial inspections may be what you are looking for if you want to have more diversity in your inspections. The clients who hire commercial inspections to be done are usually willing to pay higher prices for services, so it can be a lucrative career.
If you are willing to put forth the effort to expand your education and handle bigger projects, commercial inspections might just be for you!