When inspecting a new commercial property for your potential involvement, pay particular attention to the physical risks that the property presents or may experience.
Let’s look firstly at an example of the risks the property can present.
Asbestos Risk
One off the biggest challenges for the older properties today is the potential or established existence of asbestos. This building product was once in extensive use throughout the period to the early 1980s and therefore affects many investment properties that still stand today.
This is a major physical risk which needs to be managed; the asbestos has the potential to affect the health of people in the property and adjacent area. In particular the asbestos tends to degrade over time and can release fibres into the atmosphere which then presents a higher health risk for humans. Insurance Car One Day . Factors such as this become a financial burden to a property as the asbestos needs to be managed and eventually removed. All of this involves major monetary outlay. In many circumstances the asbestos will have to be removed before the property is considered saleable.
Tenant Generated Risk
Naturally there can be other physical risks that the property presents which would also need to be managed. For example, the tenants business can involve activities which are considered high-risk. This may involve the storage of chemicals or the storage of flammable materials. If the tenant brings such risk to the property then the lease is the best way to manage that risk.
This is a good reason for the need for a powerful and strong lease which supports and controls factors of occupancy in a way which minimizes landlord exposure to liability. If anything from the property affects the environment and the precinct locally, then the local council and possibly the state government will look to the landlord for rectification and liability. A well structured lease document will support the landlord and their relation to the tenants should such unfortunate event occur.
Precinct Risk
When you look beyond the boundaries of the property there are also physical risks that the precinct presents that can significantly affect the property and his occupants.
Flooding is one of these physical risks which occurs randomly but can damage the property significantly. If the property is located in a potential flood risk area, considerations need to occur in the creation of lease document so that the landlord is held less liable in the event of the flood. Loss of rent is one of those factors. Consequential Damage and Loss of Rent Insurance is a wise strategy to support the Landlord in this regard.
Obviously any new tenants entering into occupancy need to have their business type balanced against the risk of flood or natural disaster. small bathroom remodel . Alberta Foundation Repair Contractor . For example, the tenants that use extensive chemicals and inflammable products in a high-risk industry should not be located in area which has the potential for flooding. The environmental damage which can occur in the release of chemicals into flood waters is an unacceptable risk the landlord should not expose themselves to.
Whilst we have summarised only some of the potential risks, there are many more which can apply to investment property. Hence the physical review and awareness of these matters by a professional real estate agent is important as part of bringing the property into the Clients portfolio for future sales leasing or property management.
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