houses being appraised with a magnifying glass

The final valuation of a property considers a complex mix of factors, and only a certified property valuer can provide the best, most realistic value for your childcare centre.

There are several reasons to have seek out the services of a Professional Property Valuer:

  • For a mortgage/loan security
  • Pre purchase or
  • Pre sale requirements
  • Family/Partnership settlement
  • Litigation purposes
  • To ascertain transfer duty or
  • Capital gains tax

Building insurance (replacement costs assessments).

Whatever the reason you require a valuation for your childcare centre, having a certified property valuer is essential for you to get a clear view of what the property is worth. Here we will consider some of the most important factors that contribute to the final figure provided by your valuer.

Land and Location

Firstly, the valuer will visit the property. Here they will measure the land and record its area, topography and interesting environmental features. They will also record the location and other physical measurements, such as the location of buildings. Since land value appreciates while buildings tend to depreciate, the vast majority of a property’s final value is accounted for by the land. Any major advantages and disadvantages of the location will be outlined in the final valuation, as well as any available services and planning zoning (if applicable). This is important to consider as the land is valued not considering the type of business – expensive land would mean a high valuation regardless of business quality.

Buildings and Structures

The property valuer will consider all buildings and structures on the property and their potential uses for different commercial entities. The valuer does not complete a building assessment – factors like plumbing and electrical systems are not valued. This is a very important factor when considering purchasing a childcare centre, as it assesses the viability of the building for your business.

Commercial Property Returns

The final property valuation will include a calculated basis of return as a ratio of commercial rent per square metre of floor area. The valuer compares this to market research of rental values in the area to ensure that the figure is sensible and reasonable.

Your commercial property valuation will include a list of outgoings which are recoverable or non-recoverable, and which can be passed onto tenants. This enables you as the landlord to consider the net annual income receivable from the property. Yield figures reflect the returns for similar nearby properties – this could be crucial for deciding on future investments. This is especially important for investors interested in leasing the buildings to a childcare centre so that you have the best information about what you can realistically expect.

Additional Factors

Other factors which are typically included in the valuation are a statement of any proposed property improvements and a section on “Assumptions Requiring Further Consultancy”. This section covers any assumptions that the valuer has made which would need further investigation by other experts – for example surveyors, architects, engineers or pest inspectors. The report should also include recent sale figures for similar properties in the area. This section of the valuer’s report should help you consider further actions required before you sell or buy the centre.

Important Characteristics of a Property Valuer

When you come to choosing a commercial property valuer, the most important thing to confirm is that they hold Certified Practising Valuer (CPV) status. This confirms that the valuer has completed appropriate study, has enough experience and that their valuation will be reliable and be recognised by courts of law and other professionals.

Should you require further information on valuing your centre, please contact the Childcare Concepts team, child care consultants with real industry experience.

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