What is a valuation pack?
The valuation of a property once it’s been developed or renovated is a key point in the development cycle. A good valuation by a lender allows you to release equity to pay off debt or reinvest, a poor valuation means you’ll leave more equity tied up in the project than you wanted.
To help the surveyor, many people – us included – prepare a valuation pack. The valuation pack is a pack of information with the explicit aim of informing and helping the surveyor in his task. The implicit aim of course is to paint the property in the best light possible and exert some subtle influence over the process.
Are they necessary?
And do they work? Hard to say. We’ve had surveyors who’ve been very receptive to them, and have gone as far as to interrogate us on our plans for the future of the property and our experience in developing and operating it. For them, I’ve no doubt having a professional valuation pack was helpful. We’ve had others who have point blank refused any information whatsoever, who’ve avoided conversation on anything property related and have gone about their job in near silence, rendering our preparatory work pointless.
But overall our view is its better to have it ready if needed rather than not.
Here’s what we include:
- Property info: address, description and other key facts;
- High-level numbers: purchase price, legals, development costs, gross rental income, running costs etc. (We DON’T put in our estimate of value here for fear of teaching the valuer to suck eggs and piss them off). Consequently, there is no ROI in here;
- Before and after plans if there’s been a significant change;
- Description of the renovation works and costs: the more improvement and value added the better;
- Photos: pictures speak a thousand words. Some before pics if there’s been a big change, but we focus on ‘afters’ as that’s what you want them to focus on and remember;
- Comparison sold prices (not asking prices – sold prices): the more recent, the closer and the more similar the better. Again, this isn’t trying to teach them to suck eggs, but providing some simple facts and saving them a job is helpful IMO.
- Signed letting contracts (redacted for GDPR) to prove rental income.
We put all of this in a branded professional document – simple, clear, and concise.
We also like to take it on an iPad so if they ask any questions we can scroll through it and show them, then offer to email it to them.
How do you give it to the surveyor?
A question we often get asked is “how do we give this to the valuer?”. Good question. We’ve tried been blunt: “I’ve made a pack of information, can I give it to you?”, but sometimes this has made them wary of receiving something designed to influence them.
So now we take a slightly sideways approach: “I have plans, would you like me to send them to you”, or “would you like a breakdown of the costs, I could send you one” etc.
Some may be receptive, some may not, but I’ve never been in a situation where being prepared and professional was a disadvantage.
Do you prepare a valuation pack, and if so what do you include?
Philippa and Tom Charrier are founders of FAT Properties. FAT Properties was created to make a positive impact on the world through property development. FAT Properties create exemplary student homes designed for wellbeing.
Philippa and Tom have a 20 years of combined experience in the built environment, working on high profile urban regeneration projects. They understand the impact that the built environment has on people’s behaviour, mood and mental wellbeing.
FAT Properties is pioneering wellbeing led design in property development and transforming the student property market. Philippa and Tom authored the Amazon #1 bestseller ‘Designed for Wellbeing https://amzn.to/3nrzW0v. They are hosts of their brand new podcast Designed for Wellbeing https://wavve.link/DesignedForWellbeingPodcast
They work with investors to build long term wealth whilst delivering a positive social impact.