Rent Roll Valuations
Rent roll valuations are one of the most common valuations done by Business Valuer Network members. We value many real estate practices each year and have a broad data base of sales from which to draw. The Macquarie 2009 report on Australia's real estate industry suggests that new south wales agents have the highest expectations of the revenue price multiple they expect should they sell their rent roll.
The most common rent roll valuations method is to identify the annual management fees earned by the agency over one year (excluding extra fees such as inspection fees and letting fees) and to then apply a multiple of between 2.0 times the management fees and 3.3 times the management fees of the rent roll.
The lower end multiple is for less desirable rent rolls (such as low rent, high churn, high social problem apartment blocks) and the higher end of the multiples is for desirable properties such as single residence houses with a low churn rate and higher weekly rentals.
City rent rolls valuations generally produce higher valuation multpiles than country rent rolls valuations. Other factors which are factored into rent rolls valuations include whether the fees being examined have been grown organically or whether they have been purchased from another real estate agent...also, how compact or spread out the rent roll is geographically and finally whether the outgoing owners are staying on as staff or offering little help in the transition period.
Rent roll valuations are complex and need an experienced valuer. The good news is that an experienced valuer should be able to produce a report for as little as two thousand dollars .... and that this report should assist in finance applications.
Call Graham O'Hehir for more details on having your rent rolls valued on 1300 634588.