Drones Improve CRE Appraising

commercial real estate appraiser operating a drone to inspect properties. Drones improve valuation services.
Commercial real estate appraiser operating a drone

Drones are changing the game when it comes to commercial real estate appraising. Drones augment an appraiser’s capabilities on inspections of commercial properties. Aerial drones obviously show more of the property. They are relatively inexpensive, as compared to helicopters, and they contribute to a safer working environment. 

Aerial drones provide easy access and viewing perspectives that are impossible to replicate from ground-based shots. Thus, drones have real practical applications in the valuation of real estate and need to be addressed in the scope of work.

But it’s not as simple to get started as just buying a drone for your appraisal firm. While flying a drone is permitted without a license for recreational use, that is not the case when it’s for any kind of commercial enterprise.

How to get started with drones: the red tape

In the United States to use a drone for real estate services, you will need to obtain an airman certificate, alongside a small unmanned aircraft system rating from the FAA. 

There are two paths you can take to get your Part 107 Remote Pilot Certificate for commercial use. The first is to obtain a pilot’s license for traditional aircraft. For obvious reasons, this solution is not the most viable for most appraisers.

Alternatively, an appraiser could enroll in FAA-sponsored training and take the FAA Unmanned Aeronautical General Knowledge Test. In order to pass, adequate knowledge in airspace classification must be demonstrated, as well as, flight restrictions, and radio communication procedure. There are other aspects of commercial flight rules and regulations that need to be retained. After passing the test, an appraiser will be eligible to receive the Part 107 Remote Pilot Certificate. It’s at this stage that your appraisal firm can get started using a drone for commercial work.So why go to all the trouble of getting a license? Below we list the top benefits of using drones for appraisal reports. 

Better aerial photography

The ability to take detailed, high-resolution aerial photographs is one of the key benefits of using drones in your appraisals. 

As any appraiser will know well, taking pictures at the inspection is key to adequately assessing a commercial property. Drones can take pictures where other forms of aerial photography fall short, particularly in up-close shots. They operate well in inclement weather, and that technology and capacity is improving all the time. The obstacle of bad weather prevents other aircraft like helicopters. Drones are also not subject to the same aerial height restrictions. Thus, they can get better shots than traditional aircraft.

Beyond just bad weather, appraisers can be prevented from accessing difficult to access areas. It can be especially difficult to appraise alpine property, or to walk the perimeters of property at steep inclines, with severe overgrowth, or in marshlands. Drones can provide access at a fraction of the cost of a helicopter, and in inclement weather conditions.

Low cost

As mentioned, commissioning aerial maps for an appraisal can be very expensive, and take lots of additional time and organization. By utilizing a drone, your firm can save on the rental cost for the aircraft, the hiring of the pilot, and you’ll also be more time-efficient. Drones are relatively inexpensive, with commercial grade units starting around $300. Another cost-saving feature of commercial drones is the fact that fuel costs are nonexistent; the vast majority run on rechargeable lithium-ion batteries.

Supplement to satellite photography

Your appraisal maps and reports may be used in ongoing litigation or to create legally binding documentation. Many legal professionals and companies choose to use satellite photography. These photographs have two significant drawbacks: they’re expensive, and they are not typically not in real time. You can create value for your clients by leveraging a drone to take accurate, up-to-date property photos.

Safer working environment 

Drones are the safest form of aviation the world has ever known. That may sound like a bold and outlandish claim, but it is true. Most drone collisions involve birds, bats, or balloons. And more to the point, in more than 10 million flight hours, not a single person died from a drone flight. Unlike other forms of aviation, the accidental fatality rate for drones is zero. This makes drone operation unquestionably the safest form of aviation the world has ever known. 

What are the Rules for Operating a Drone while Appraising? 

On September 13, 2016, aerial inspections using drones were initially addressed by The Appraisal Foundation in a USPAP Q&A Issue. It stated that unmanned aerial vehicles, or drones, are a tool, such as binoculars. They can be used to enhance the view of a property. The report stated that use of a drone, without a visitation to the property, would not constitute a personal inspection.

Then, in the 2018-2019 USPAP Publication, FAQ 214, drone usage in appraising was further expanded upon. It stated that in order for an appraiser to state they made a personal inspection, a visitation must occur in conjunction with the use of the aerial drone. 

Indeed, USPAP does not require a personal inspection. However, it does require publishing the extent to which the property was inspected. And the means of which the inspection was achieved. The basic scope of work requirement is to clearly state whether an appraiser has personally inspected the subject property. A personal inspection, as defined by USPAP, is having a physical presence at the property. However, how this is determined is left up to the appraiser. 

The extent of the inspection is the appraiser’s responsibility. How much it is explained can vary from a minimal statement to providing a detailed explanation, and will be influenced by the scope of work. The same options are reasonable if a drone is utilized.

NxNW’s Verdict on Drones

Aerial photography and videography have already made an impact on various real estate industries. Real estate brokers enhance their listings and selling power with aerial imagery. Construction workers are able to show leaks on rooftops as well as heat loss. Tax assessors can inspect more properties at volume. Developers are able to assess their projects in real time. And insurance companies are developing baseline assessments. The drive for data is real and always increasing. Appraisers are well positioned to take advantage of the burgeoning technology of drones. 

We are excited about the professional use of aerial drones, and encourage questions or comments.  Please feel free to reach out to us at admin@nxnwconsulting.com for more information about how we are harnessing the latest technologies to improve our appraisals. Drones are the future of aerial property photography. By utilizing this technology in your appraisal business, you can gain a competitive advantage. 

Want more tips to improve your appraisal process? Contact us today.

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