The housing market in Dallas, TX, has been growing steadily recently due to a fall in prices. However, you should wait to sign any deal before conducting commercial property due diligence.
If you are a first-time buyer or an experienced investor, having a property assessment checklist can safeguard your investment. Read on as we explore the three necessary steps in conducting due diligence.
1. Properly Inspect the Property
It's vital to inspect the commercial or residential property before any purchase in the real estate market. Visit the property physically if you are in the area to check its condition. Pay close attention to defects and assess the property's condition based on expected wear and tear.
When conducting the property inspection, also follow up on the following:
- Preliminary research
- Environmental due diligence
- Zoning and land use laws
Preliminary Research
Commercial property due diligence should involve doing preliminary research into your prospective investment. Collect basic information about the property to understand details such as:
- Vacancy status and trends
- Local property demand
- Rates on rental properties
Environmental Due Diligence
Hire a property manager to help you conduct an environmental inspection of the property. Experienced property management companies offer full property management services covering inspections and due diligence.
An environmental inspection is necessary if you are purchasing an old commercial property. Check for lead paint, signs of contamination, or asbestos.
Zoning and Land Use Laws
Review the zoning laws and any other regulations that may affect land use related to the property. Doing so helps you understand what permits you need to run the commercial property and which activities are legally allowed in Dallas, TX.
Conducting an inspection is crucial to understanding ways to navigate lease agreement analysis. A property manager can also assist you with investment risk evaluation to minimize potential losses while maximizing profits.
2. Legal and Title Due Diligence
Conduct a title search of the property to determine its true ownership status. A title search can help you find out if there are any encumbrances or ownership disputes. In addition to a title search, make sure to check other legal aspects such as:
- The existing leases
- Current legal obligations
- Property taxes or any outstanding fines
A commercial property manager can give you a real estate investment guide that will enhance the management of commercial properties. The manager will also help you get title insurance to safeguard your investments against undisclosed disputes.
3. Tenant Due Diligence
There is still good growth potential for commercial real estate, according to Price Waterhouse Coopers. Many commercial properties often come with existing tenants. So, it's essential to examine existing lease agreements.
A local property manager can help you understand real estate market trends in the Dallas, Texas, area, enhancing your ability to make smart decisions.
Conduct Commercial Property Due Diligence Today
Buying your first property or growing your portfolio is very exciting. But you can make costly mistakes if you don't take the time to conduct commercial property due diligence. Having a property assessment checklist can help safeguard your investment.
Working with PMI Property Management gives you access to more insights to safely maximize your returns. Contact us today to schedule your free consultation.
