For our real estate accounting clients, there often comes the time in their career when they can see the end of the road for the rent roll business, and they’ve decided it’s time to get out.

We run through all the tax work for them, develop an estimated amount they’ll get from the transaction, and we figure out the best way for them to get out cash-wise.

But what should a potential vendor be thinking about when they’re going to list their rent roll on the market?

I checked in with Alan Dawson, Director of Agency Broking, to discuss what you should do to prepare for your rent rolls for sale.

 

prior preparation prevents poor performance

Selling a rent roll is not a ‘spur of the moment’ decision. In most cases, the energy might have gone out and you know that the time is right to put that business or rent roll on the market.

If this is you, ensure you do your homework. Do prior preparation and get everything set before you go to the market. If that means delaying that decision by a month or two and bringing in some expertise, please, please do that.

This is not just any decision. This could be a multi-million-dollar transaction for you and possibly your retirement fund. As such, it isn’t something you want to rush without being properly prepared.

 

get the experts involved

Getting experts to come in and look at your portfolio, run the appropriate numbers and determine what that looks like financially for you, is absolutely imperative.

And don’t just rely on the information that you think as an owner that your rental portfolio might look like, because it may not. The last thing we want is for you to have is an unexpected surprise.

You may have had different staff over time as they come and go. Their intent is to make sure all the documents are correct and up to date, but sometimes they’re not. Going to the market and then having that portfolio exposed with flaws in relation to management agreements, entry and exit reports and so it goes on… it’s not the time to be there.

You need to know that information is upfront before it goes to the market.

 

what is a squeaky-clean portfolio?

Having correct, up-to-date information is important so that your rent roll broker can have a stronger discussion and get you a better price, knowing that your portfolio is squeaky clean. This looks like:

  • Look at all your form 6’s
  • look at all your entry and exit reports
  • Tenancy agreements are up to date
  • Arrears and vacancies

This isn’t information you should rely on just as you’re told. Be analytical and make sure you get the right information. Whether you get that information yourself, or you bring in some level of expertise, have a professional come in and do an internal audit on your portfolio, identify any issues, and get your rent roll sorted.

Then, when you finally go to the market, it optimises your price. This is no different than getting a house styled correct before you take it to market.

Our biggest recommendation is prior preparation, be analytical and get the right expertise. This will optimise your rent roll and get you to a higher number in the end.

 

we’re here to help!

If you’re looking to sell a rent roll you can check out our Agency Broking page for available listings.

And if you do get an opportunity to look at a rent roll, please feel free to reach out to myself or the businessDEPOT team at oneplace@businessdepot.com.au or give us a buzz on 1300BDEPOT. We can help you run the numbers and determine if it’s right for you.

 

 

general advice disclaimer

The information provided on this website is a brief overview and does not constitute any type of advice. We endeavour to ensure that the information provided is accurate however information may become outdated as legislation, policies, regulations and other considerations constantly change. Individuals must not rely on this information to make a financial, investment or legal decision. Please consult with an appropriate professional before making any decision.