Real estate is a lucrative niche for many people, and there is a lot to stand to benefit from acquiring land as far as re-selling, development, and other purposes. However, just as you would want to have a used car inspected before paying for it is important to know what you are getting into when it comes to purchasing property, and for that reason Environmental Site Assessment surveys are extremely important in the buying and property selection process.
Unfortunately, in this day and age hazardous waste is a real thing and a real profit-killer at that. For this reason, Phase I and Phase II surveys and reports are more important than ever, as they can help to identify ten of the major hazardous waste monsters out there that are destined to kill your real estate profit.
For your information, these ten hazardous waste monsters are:
o Buried Oil Tanks
o Previous Gas Station Sites
o Hazardous Waste from Adjacent Properties
o Previous Industrial Site
o PCB’s (Typically from fluorescent light ballasts)
o Previous Military Sites
o Contaminated water supply system
o Dangerous Farming Chemicals/Pesticides
How to Tell If You Are At Risk
Unfortunately, most of the hazardous waste risks are rather difficult to identify, especially just by looking at the property. Even some basic inspections fail to identify these key problems, so it is extremely important to make sure that you obtain an Environmental Site Assessment just to make sure that you don’t have any of these problems to look forward to.
Phase I and Phase II Environmental Assessment Reports can give you an idea of what there is on your property. This assessment is done by inspecting and taking samples of the flora on your site as well as some other environmental samples. The samples are then bottled and taken to a laboratory and the tested for the presence of hazardous waste. This may take anywhere from a few weeks to a few months and it can be a very costly procedure, but very worth it in the end as the value of such a property is drastically lowered.
In addition, the owner of the property or the owner of adjacent properties might also be able to give you an idea of what things to look for before the inspection is even performed, as they can often remember the purposes the site has been used for in previous years.
A Phase I report will give you some idea of what to expect and a Phase II report usually follows as a more extensive version of the Phase I report.
What If There Are Hazardous Materials Present?
If your Environmental Site Assessment determines that you have one of the ten hazardous waste monsters to deal with, that is not necessarily the be-all and end-all of your property investment. A Phase III report can be obtained to determine what steps need to be taken to rehabilitate the property, but this assessment is often financially draining and extremely time consuming as well. Whether or not you want to proceed with the purchase of the property is up to you, but the presence of hazardous waste sucks a lot of the value out of a property and that must be reflected in your purchase price, as this type of project can be very costly to rehabilitate.
If it has been determined that there are hazardous waste materials present on a site that you have purchased, or are thinking about purchasing, it is important to note that the value of the property is drained immediately. It is no longer as valuable a piece of land because even after it has been cleaned and rehabilitated, there are certain things that it cannot be used for. Usually land must be zoned for certain purposes and it can only be zoned for certain types of buildings or uses. After the presence of hazardous waste materials has been determined, it may or may not be in your best interest to proceed with the sale depending on what you had planned to use the land for in the first place.
Hazardous waste materials can definitely be a killer when it comes to dreaming of a certain use for your site, but know their presence is not always a deal killer. There are things that can be done to make land usable after the presence of hazardous waste has been determined. If the numbers make sense on the allowable use for the land, it is just a matter of negotiating a purchase price that works and rehabilitating the property for development.
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