Over time, weather and general wear and tear take a toll on buildings and their components. Buildings, therefore, need to be assessed from time-to-time to determine their condition and to address any problems that may be found. This information is detailed in an engineering report which is based on an inspection of the building. During the inspection, an engineer verifies the structural integrity and the overall general condition of the building. The engineer then produces a report which discloses all the building’s problems and makes recommendations on required rehabilitation or major replacements.
Before a property is presented to investors, Equity Builders commissions an independent engineer to inspect the property. The engineering report that follows is made available to investors for their review to give them confidence that the building they are investing in will not require any costly renovations and/or repairs in the foreseeable future.
An appraisal of a condominium unit is a formal, impartial estimate of its worth. Appraisers walk through units to get an idea of their general condition. Appraisers typically document the condition of the property, both inside and out, and note the layout, features, the degree of modernization, including any updates, as well as the overall quality of construction. Appraisers ask vendors about any visible problems, as well as those which may not be visible, and do their best to gauge any impact on value attributable to those problems.
Equity Builders does not arbitrarily set the price of the units it offers to investors. Instead, Equity Builders has an independent appraisal performed on each individual condominium unit and the appraisals are made available to the investors. This ensures investors that the purchase price of any unit has been set at an objective and fair price.
On Site Inspections
Before any property is offered to investors, it first goes through a screening process by the Equity Builders team which includes the heads of operations and sales as well as the property manager. The Equity Builders team performs an on site inspection whereby they evaluate the neighborhood of the property and walk through each unit to gauge both its condition and the tenant that currently resides in the unit. This screening process allows the team to use their combined years of real estate and property management experience to judge whether the property is a potential candidate for presentation to investors and it continues only if the property meets their collective approval.
The on site inspection is part of the process that ensures investors that they are only presented with the best investment opportunities as determined by experienced real estate investment professionals.
Property Management Report
A property management report provides information on the turnover rate, vacancy rate, quality of tenants, and level of maintenance required on the building. Since tenant and ongoing maintenance issues are two of the highest concerns for any rental property investor, this due diligence is performed to determine how difficult it will be to rent out the units and whether an unusually high cost is associated with maintaining them. As \part of this report, the property manager reviews all tenant leases to confirm the quality of the tenants. The property manager also inspects each unit and completes a suite inspection sheet for each one. This inspection provides the property manager with valuable information as to what repairs are required in the suite and the life expectancy of capital items. Included in this due diligence is a review of all disclosed revenues and expenses provided by the vendor.
This is undertaken to give investors assurance that they are purchasing units with low vacancy rates and low maintenance fees and that the investment will be as headache free as possible.