5 things that make your rent roll more valuable

If you’ve just started building a rent roll or are looking to create one, read our insights into what the characteristics of a valuable rent roll are.

You might build or purchase a rent roll under the guise that this asset will accumulate wealth for you to eventually sell on retirement. This is true; however, did you know that there are many variables that determine the value of a rental portfolio and therefore the multiplier for sale? Greenhouse Property has teamed up with Teri Roberts, Certified Business Valuer at GWA Business Valuations to share some insights into what a high value rent roll looks like.

The top 5 attributes that Teri evaluates within the rent roll to determine its value are:

1) Average weekly rent of the portfolio - ensuring that this figure is within the catchment averages and growth of rental yields in the area.

2) Average commission/management fee rate per property – confirming these fees are within an acceptable rate range.

3) Vacancy rate and arrears rates – these should be within the average for the location and industry standard. These factors are very good indicators of efficient and effective processes being in place by the property management team.

4) Property to Landlord ratio – this is an important factor as if the ratio is too high and there are a smaller amount of landlords that contribute significantly to the income of the portfolio, then the risk of maintaining the income of the rent roll into the future increases.

5) Geographical spread of the portfolio – if it is too widely dispersed, the pool of potential purchasers may be lower and operating costs will be higher than a closely held portfolio.

Greenhouse Property partners with property management experts that manage a high value rent roll for you, all you have to do is refer the property.

Want to know more? Contact our team today.