APRIL 2001 


The due diligence process is much more sophisticated than it has been in the past. What are the benefits of doing a thorough inspection of the property? If being in the real estate cycle teaches you only one lesson, it is to do your homework. 

When evaluating property conditions, there are FIVE financial considerations related to the condition of the property.  

#1 Are there unusual or abnormal conditions that could impact the short or long term performance of the property? 

#2 How much capitol will the Owner be required to lay out for initial restoration to fulfill objectives? 

#3 How does the general condition of the property compare to that of the neighborhood/buildings/life-styles of the immediate area? 

#4 Does the property have major components that are likely to experience premature deterioration/unexpected capitol financial outlays? 

#5 What building systems could be upgraded or replaced to reduce operating expenses and increase the property's Net Operating Income? (NOI) 

Coordinating an inspection of the physical components/operating systems: collecting and submitting well-organized and detailed data, will give you the ability to make an intelligent analysis when your inspections are completed. 


Source: Property Management Journal

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This web page was updated on 03/30/2001