Top 6 Questions to ask before purchasing your next commercial property

Updated: Aug 23, 2019



1. Who has jurisdiction over the site?

If your site is located within city limits, important regulations such as zoning are determined by a city government. If not, they are defined by a county government. This is important to know early so you know who you need too contact to get information about their regulations.


2. What is the size of the site and where are its boundaries?

The overall size of the your site and the length of the property line against the street are important to consider in making sure that the site is compatible the goals of your structure.


3.What are the site’s soil conditions?

The soil must be investigated by a soil testing company to determine its bearing strength, or whether or not it is suitable to build on, and overall compatibility with the project. If the soil is not capable of withstanding the building’s load, you may have to replace it or install special foundation improvements, which can be very costly. Furthermore, some soils expand when they come into contact with water, which can cause cracking in the building’s foundation. Before purchasing a property, it is vital to understand the soil and its implications.


3. Does an analysis of the site’s history suggest potential soil contamination?

This is determined through a procedure known as a “Phase 1 Environmental,” in which a contractor or engineer investigates the site’s history and determines if there is a risk of previous contamination. If a potential for contamination is identified from this review of the site and surrounding area’s history, a “Phase 2 Environmental” is performed. In the second phase, the soil is actually tested for contamination to verify that contamination does not exist.


4. How flat is the site?

If the site is located on a steep slope, building on it will necessitate significant sitework and construction expenses than it would otherwise. This requires additional time and increased cost of the overall project.


5. Are there any natural resources or environmental characteristics on the site that could prevent building there or add to expenses?

If the site is home to endangered species or protected biomes (see Zoning/Legal Information), you may not be approved to build there. Even if a certain environment is not protected by law, it can create difficulties and add expenses to a construction project. For example, an unpreserved wetland will have to be drained before it can be built on, which would be a pretty expensive ordeal. Furthermore, if the site has a high density of trees, building on it will, at the very least, mandate the removal of quite a few trees. In addition to the cost incurred from simply removing the trees, there also might be local regulations that impose fees for the removal of trees (see Zoning/Legal Information).


6. Are there any obvious site issues that could detract from your investment’s success?

It is often helpful to talk with people who live or work in the area to find out if there are problems with the region (e.g. high crime rates).

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