The rent roll market is active, but make no mistake – it remains competitive, with buyers becoming increasingly selective and focused on quality. Following a strong AAMI, the question we’re hearing from most sellers is: What does a rent roll buyer actually want right now?

Below is a list of the key things we have seen buyers look for when assessing a high-performing rent roll.

 

1. current authorities

This is non-negotiable. Buyers want to see Form 6s that are compliant and reflect the current agreement with the landlord [e.g. current commission and fees charged]. Many financiers will not provide loans for properties without a compliant Form 6, so this is a critical step before going to market.

Consider having an external consultant conduct a pre-sale assessment of your agreements to check they’re compliant. This relatively small investment [compared to the value of your rent roll] can make a meaningful difference to the progress of the transaction.

For more on rent roll transactions, download our free legal guide here.

 

2. quality staff

Buyers with growing rent rolls need quality staff. If you’re putting your rent roll up for sale, the team who come along with it will be viewed as a key part of their criteria.

Your staff are the people who’ve built the relationships with your landlords, and buyers are looking to preserve and keep those connections going. It’s a win-win for you as a seller, as it helps protect your retention outcomes during the retention period.

 

3. location + geographic spread

Buyers pay close attention to where properties are located. While some geographical spread is expected, tighter clusters are typically more attractive. Why? Less time on the road means lower servicing costs and greater efficiency, which directly impacts profitability.

 

4. landlord-to-property ratio

As rent rolls grow, it’s common for landlords to own multiple properties. Some concentration is fine, but buyers are conscious of the risk that comes with losing a single landlord who owns several properties at once.

Where there’s higher concentration, buyers may seek a longer retention period or apply a lower multiple to reflect that risk.

 

5. strong management fees

Buyers look for management fees that are appropriate for the area and well-structured. They want to avoid discounted management fees, as this can signal that landlords are only staying for the price and may be more likely to leave if the new owner needs to increase rates down the track.

 

6. lower arrears + vacancies

High arrears and vacancy levels are warning signs. Buyers want to see strong systems in place and evidence of proactive management.

In more severe cases, buyers may exclude impacted properties altogether or apply a lower multiple to reflect the added risk.

 

7. quality properties

Buyers avoid properties with high maintenance issues or those requiring frequent repairs. They look for landlords willing to reinvest in property maintenance, which can reduce direct management time over the years.

 

8. property for sale

A high number of properties on the market can make buyers nervous, as rent roll income can drop quickly after the retention period. This doesn’t mean deals can’t be done, but it does need to be managed carefully.

 

we’re here to help 

There’s a lot to consider when putting your agency or rent roll on the market. Buyers are looking at all these factors and more. For a confidential discussion about your business, or to understand more about the current state of the market, please do not hesitate to contact me on 0417 886 352 or email b.dean@businessdepot.com.au. 

 

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Article originally published 25 November, 2024