The bulk of the value in a real estate agency lies in the rent roll, and the value of a rent roll depends on many factors, including the geographic spread of the properties, the commissions being charged, the level of landlord ownership, the sundry fee structure, and the length of time the properties have been under management with the Seller, among other factors. Market conditions such as market demand and growth potential also come into play, as do trends in localised areas. To determine what your rent roll or real estate agency is worth, the best course of action is to contact QLD Rent Roll Brokers for an appraisal that can provide a realistic estimate.
A multiplier is applied to the projected gross commissions for the rent roll, assuming all properties in the rent roll are fully let for the next 12 months. The multiplier varies by market and is determined by many factors, such as market demand, property locations, fee structures and earnings, length of operation, staff availability, and so much more. To find out what multiplier your rent roll might achieve, it is best to contact QLD Rent Roll Brokers for an accurate appraisal.
An appraisal estimates market value for planning purposes, while a formal valuation is conducted by a licensed valuer for legal or financial purposes.
Sales timelines vary but generally speaking it can take several months depending on complexity, market conditions, and Buyer readiness. Collating all the information to present to Buyers can take time if the information isn’t readily available and forthcoming. Actively marketing your rent roll for sale, fielding enquiries, and procuring offers from potential Buyers also takes time. If we have a Buyer ready to purchase your opportunity right away, you would be looking at least 3-4 months for negotiations, contract preparation, satisfaction of terms, and settlement. The contract process itself can take 2-3 months, depending on how quickly the solicitors are able to act and how long the Finance and Due Diligence clauses are. We always suggest contacting us as soon as you start thinking about selling, as the process can sometimes take a lot longer than anticipated.
We have a database of pre-qualified Buyers to streamline the process. We also have a network of franchise managers, financiers, solicitors, and professional consultants and advisers who are in regular contact with prospective Buyers.
Yes, partial sales are possible, but depending on the circumstances, it can sometimes be harder to find a Buyer for a partial rent roll. Most Buyers would like an entire rent roll where the Seller is no longer operating a property management business or, even better, exiting the industry, so while a partial rent roll sale is possible, the structure of the sale and the restraint terms should be handled carefully with professional guidance.
Our general rule of thumb is that to be enticing to a Buyer, a rent roll needs to be bigger than what the Buyer could reasonably grow themselves organically. While we have seen some very small transactions take place over the years, realistically you would want your rent roll to be sitting between 20-30 managements at least before you consider selling. From the Seller’s perspective, once the legal fees and broker commission are taken into account, there may be very little funds, if any, left over, so if the reason for the sale is purely financial, this may not be your best option. Another important point for a Seller to consider is that with smaller numbers, each loss is weighted far more heavily, which can have an impact on retention claims. If you’re considering selling your rent roll, give us a call to discuss your strategy and let us provide our advice on the best approach for you.
All rent roll contracts are subject to a Due Diligence clause, which can be anywhere from 7 to 28 days. The Due Diligence clause allows the Buyer the opportunity to review the rent roll and verify the data that has been provided to them to ensure they are happy with the purchase. They will most often check that the management agreements are compliant and that all the required documentation is kept on file for each property. This can be conducted remotely with read-only access to your property management software or you can request that the Buyer attend your office over a number of evenings and weekends (after hours). Depending on the size of the rent roll, some Buyers will take a “snapshot” of 20-25% of the properties, while others will meticulously check each property file. Some Buyers will even appoint a third-party Due Diligence provider, such as an accountant or a consultant, to conduct these enquiries on their behalf.
The Retention clause is there to protect the Buyer against losses that are outside of their control. The industry standard for retention in Queensland is 20% for 90 days. However, sometimes Buyers may use the Retention clause to negotiate a better deal for themselves or to mitigate any perceived risks by offering a longer retention period or a higher retention value. The Retention clause stipulates that 20% of the purchase price is paid into the Seller’s solicitor’s trust account at settlement for a period of 90 days. At the end of the 90-day period, the Buyer is able to claim lost managements from the rent roll up to the value of 20%. This effectively means that a Seller can potentially have to refund 20% of the purchase price to the Buyer. However, if managed effectively, Retention losses are often minimal. Contact QLD Rent Roll Brokers today to discuss how you can minimise your Retention losses.
An experienced specialist broker will manage your sale discreetly, keeping the sale of your business confidential from competitors and staff.
There are so many benefits to using a broker, and an experienced specialist broker at that. A specialist broker provides market insights and exposure, connects you with qualified Buyers, maintains confidentiality, negotiates strategically, and manages the sale process end-to-end, often achieving a higher sale price. A specialist broker knows what information to provide to potential Buyers, allowing them to make decisions more quickly. An experienced broker will help you to avoid common pitfalls such as poor preparation, inaccurate records and data, and unrealistic pricing.
Typically, fees include an upfront engagement fee for marketing and administration, with a negotiated commission payable upon completion of the sale. You will also need to consider that legal fees and accounting fees will also be payable to your professional advisers.
Yes. Capital gains tax, GST, and other taxes may apply. Consulting your accountant is strongly recommended.
Our brokers actively search for suitable rent roll acquisitions, maintain your confidentiality, and negotiate on your behalf to secure the right opportunity.
Typically, Buy Side fees include an upfront engagement and/or retainer, and a success fee upon completion of the sale.
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