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Real Estate Practice Valuations

The Business Valuer Network performs dozens of real estate practice valuations each year. Several of the associates of the Business Valuer Network specialise in Real estate practice valuations and are on various valuation panels in this area of business valuation.

The real estate practice valuations area is specialised in that real estate agencies and their rent rolls are valued on a mutliple of  management fees rather than on a profit multiple. This practice is not unique and industries such as accounting practice valuations, financial planning practice valuations, mortgage broker practice valuations are other professions where the business is valued on a criteria other than a multiple of profit.

Real estate practice valuations are conducted where the rent roll (property management department) is valued according to the annual fees earned for managing the property portfolio, but excluding letting fees and inspection fees). It is essential any party attempting to value a rent roll must have accurate and current market evidence on the appropriate multiple of management fees to apply.

For example in some real estate practice valuations the location of the fees, their distance from the office , the various types of properties managed (flats, apartments houses etc) are some of the factors to be taken into account, plus an evaluation of the sales team, the sales fees, the importance of the key owners must all be factored into the real estate practice valuation.

Other factors which affect the valuation of a real estate practice will be the percentage of rent on which the management fees are based (7% or 8% etc) and also whether the subject rent portolio has been grown organically or whether they have been purchased from  another real estate agent.

We suggest you email support@businessvaluer.net.au and set out your requirements and the reasons behind your real estate practice valuation request. The co-ordinator of BusinessValuer Network (Graham O'Hehir)  will then contact the most appropriate valuer to get in touch with you for a no obligation, confidential discussion regarding the valuation of your real estate practice and the timeline and costs involved.