For any property investor, the journey to investing in a new property is inherently risky. While the prospect of adding another asset to your portfolio can be exciting, the potential for unforeseen complications and costly surprises looms large over every decision. Undertaking a comprehensive RICS Level 3 Building Survey can serve as an indispensable tool for both seasoned investors and first-time buyers alike, empowering them to make confident and well-informed property choices.
What is a RICS Level 3 Building Survey?
A RICS Level 3 Building Survey is the gold standard in property assessments. It provides a detailed, comprehensive inspection of the current state of the property, covering every aspect that could influence its condition or suitability for its intended use.
This examination is designed to uncover both present and potential issues that could impact the property’s value, safety, or future performance. Such an extensive approach makes them particularly valuable for older properties, unusual construction types, properties in poor condition, or situations where the investor needs complete confidence in the asset’s condition and future requirements.
The scope of this survey means surveyors are able to meticulously examine structural elements, such as the roof and covering, external and internal walls, foundations, and load-bearing components, checking their current condition and identifying any signs of deterioration, damage, or structural movement that could pose an issue. For a clear guide on the Level 3 inspection and its invaluable insights, refer to the detailed breakdown provided by the RICS surveyors at Cosey Homes.
The building fabric receives equally thorough attention, with detailed examination of windows, doors, internal finishes, flooring, and decorative elements to identify wear and areas that require immediate maintenance or replacement. The survey will also include an evaluation of electrical systems, plumbing, heating and ventilation, and drainage, checking for the safety and functionality of these elements and whether they comply with current standards.
By comparison, a Level 2 Home Survey, formerly known as the HomeBuyer Report, provides a limited assessment, making it more suitable for conventional properties that are in reasonable condition, and where a basic valuation focuses primarily on market value rather than condition.
Ways a RICS Survey mitigates acquisition risks
Financial risk mitigation
No investor wants to dive into an acquisition without knowing the full extent of repair and maintenance costs. Hidden defects and the associated repairs can result in tens of thousands of pounds to resolve. This is where a survey mitigates the risk—you’ll have a clear report outlining the most serious issues, such as rising damp, subsidence, or roof defects, so you can decide whether you want to still go ahead, have the seller resolve these issues before completion, or walk away from the purchase.
Quantifying the scope and cost of potential and necessary repairs enables investors to factor these expenses into their acquisition calculations, preventing the shock of unexpected major expenses that could derail the investment’s financial viability.
Legal and compliance risk mitigation
Legal or compliance risks are some of the most serious threats to any commercial property investment. Violations of building regulations, planning permissions, or safety standards can trigger costly enforcement action and requests for remediation. They could even force the cessation of your property’s intended uses.
A building survey systematically identifies these risks by examining the property against current regulatory requirements, highlighting any compliance issues that could result in legal liabilities for you as the new owner. Likewise, their expertise in recognising risks like contaminated land, flood risks, or asbestos-containing materials, enables the appropriate investigations where necessary, ensuring that environmental liabilities are managed from the outset.
Future planning risk mitigation
Surveys give you crucial insights into the property’s suitability for its intended use and any long-term operational requirements it might have. It’s a forward-thinking analysis that can be incredibly useful for investors who are planning specific use cases such as residential rentals or mixed-use developments.
Rather than reacting to problems as they arise, investors can also proactively plan for the likes of roof renewals, exterior maintenance cycles, and other predictable capital expenditures, including sustainable upgrades such as heat pump installation, based on a professional assessment of component lifecycles and current conditions. The report provides essential baseline information about the property’s structural capacity, services infrastructure, and regulatory compliance status which can be used to inform renovations and scheduling of upgrades.
Informed decision-making
Perhaps the most valuable benefit of a building survey is the peace of mind it provides. Property investments involve substantial financial commitments and long-term responsibilities, so having complete information about the building in question helps ensure confident decision-making. A survey transforms what might otherwise be an uncertain gamble into an informed business decision based on professional assessment and factual analysis.