360 Home Inspections

Types of Commercial Inspection Clients Across the Globe

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Individual property inspectors can make a lot of money in the business inspection market, which is mostly untapped. Our previous looked into the commercial properties and pool inspection. Let us explore in depth the types of commercial inspection and how these inspections are typically performed by engineers and architects.

Who Performs Commercial Inspection?

Engineers and architects, typically single-discipline professionals, provide detailed evaluations within their areas of expertise. However, they often charge premium fees, creating an opportunity for home inspectors to offer competitive rates. Many residential inspectors entering the commercial market initially approach it similarly to home inspections. They use the same language, branding, and marketing strategies. However, the significant differences between residential and commercial inspections require a shift in mindset and marketing for success in the inspection arena.

Nature of the Commercial Inspection Market

The client for a residential inspection is often emotionally attached to the deal, making the process potentially more challenging. In contrast, commercial property inspections are strictly business transactions. The clientele typically consists of business professionals who evaluate the property based on its potential for a positive return on investment, examining many physical and business aspects.

Unlike residential transactions based on appraisals and comparisons, commercial transactions heavily rely on the property’s history and revenue. Prospective commercial inspection clients extend beyond just buyers and sellers, encompassing a variety of stakeholders.

Types of Commercial Inspection Clients

  1. Commercial Inspection Real Estate Agents

In larger markets, it is common for agents to specialise in either commercial or residential properties. Some commercial agents focus further on specific building types, like office or retail spaces, or on transaction types such as lessors and lessees. In smaller markets, agents might handle both residential and commercial transactions. Given the specialized knowledge required, particularly in business and finance, most commercial agents hold a college degree and work for large firms with a formal and corporate culture. They often represent tenants, lessees, building owners, lessors, and investors.

  1. Property Managers

The majority of commercial property types are bought, sold, leased, and managed by property managers who can be private individuals or employed by management firms. These managers oversee budget management for maintenance, upkeep of property repairs, and preservation of inspection, maintenance, and repair records related to commercial inspection. They also ensure that local zoning ordinances are followed. Some property management firms have an on-site or internal property maintenance manager who works closely with inspectors and contractors to maintain the property.

  1. Homeowners’ Associations (HOAs)

In the context of commercial assessment, an HOA oversees multi-residential properties like apartments and townhomes. HOAs establish and enforce rules for properties within their jurisdiction. Depending on the property size, an HOA might hire a property manager or management company to handle maintenance, budget creation, property records, and coordination with contractors and inspectors. An HOA may hire a commercial inspector for periodic inspections or reserve studies.

  1. Commercial Inspection Governmental Departments or Agencies

Governments own, purchase, and lease various properties, including housing developments, office buildings, warehouses, and industrial facilities. These buildings are often managed by large companies, which serve as the main point of contact for inspectors. Government projects typically have well-defined requirements and Scope of Work and are awarded to the lowest bidder. Undoubtedly, inspectors ensure their proposals are based on accurate cost estimates for time, travel, consultant fees, and profit margins.

  1. Private Investors

Income-producing properties are regularly bought and leased by private real estate investors, whether they are individuals or groups interested in commercial inspection. Certain investment groups, such as real estate investment trusts (REITs), are entities that own and manage portfolios of commercial real estate. REITs provide investors with shares, allowing them to invest in a diversified range of properties across various sectors of the commercial real estate market. These investors typically engage in thorough property inspections to assess the condition and potential profitability of their investments.

  1. Banks

Banks often require inspections to establish the condition of a building for lending purposes, including issuing or refinancing mortgages. One type of inspection banks may request is a no-contact inspection, which is exterior-only and common in cases of bankruptcy or neglected buildings. Banks use these inspections to determine a building’s condition before putting it back on the market. Banks typically outline strict procedures and provide specific forms and checklists for inspectors to complete. While banks usually pay a flat fee, it may be less than what inspectors earn from other clients.

Conclusion

The commercial inspection market presents a substantial opportunity for inspectors willing to adapt their approach and marketing strategies. By understanding the diverse needs of commercial clients, inspectors can successfully expand their services beyond residential inspections. This expansion not only offers the potential for increased revenue but also allows inspectors to diversify their client base. 

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