Posted on: 31 March 2022
Commercial real estate is an important part of any portfolio it's in. And that means it must be given special consideration when completing estate planning. One professional that can help you do your estate planning is a property condition assessment consultant. How? Here are five key pieces of information you need and how they fit into estate planning.
1. Current Condition. How well do you know the details of the current condition of your property? If it's been leased out for some time, particularly by one tenant without coming back into your control for a while, you may be missing vital details about its condition. This is a baseline to help you value the property for inclusion in a will or trust.
2. Deferred Maintenance. What needs to be done to the property right now? Maintenance and repairs that have been put off for various reasons all affect the building's current value and condition. And because they're overdue, they may be the most important things that need to be addressed before a permanent valuation is possible. It helps you ensure you're passing on a sound property to your family.
3. Required Reserves. Reserves are money put aside for future repairs and maintenance within the next few years. Although most people doing estate planning hope that their estate won't be passed on any time soon, there's no guarantee. Your heirs could inherit this property tomorrow, so they — and you — need to be prepared for what it may need. You might further opt to include the necessary amount of reserves to give heirs a head start as landlords.
4. Capital Planning. How might you update or upgrade the property to improve its value to heirs? Which changes will bring significant increases in value and which would be a potential waste of money? Should you complete these and plan for the end results in your estate? These are important questions that a professional can help you answer.
5. Insurance Valuation. Finally, you protect your estate and heirs' futures by having the right insurance coverage. One of the best ways to know whether or not this is the case is to have the property evaluated by an independent third party.
Want to know more about ordering a property condition assessment? Start by meeting with a consultant in your area. With their experience and training, they'll work with you to make sure you have all the information and tools you need to pass on a strong, stable estate when you pass away.
For more information, contact a local property condition assessment consultant.Share