A quality rent roll will always sell for more. Find out what you can do to ensure your rent roll is as valuable as possible.
Consider this part of a one or two-year plan; follow the steps below, and your properties under management will be in great shape for a new team to take on. The result of this will be a much faster and more rewarding sale process.
Nine steps to create a premium rent roll
Review the quality of your PUMs
‘Quality’ can come down to several factors, including the condition of your properties under management, their location, the renters and rental property owners.
Often, 20% of your rent roll causes 80% of your problems. If there are homes and units constantly eating into your team’s time, either because something is always broken or the client/renter is problematic, consider ‘trimming the fat’ and taking steps to let them go.
In terms of location, if your ‘footprint’ is spread too far and wide, consider consolidating to fewer postcodes. You may want to look into taking on a strata roll, which will give you dozens of PUMs in one block.
Check compliance
Properties must be in good condition if your property owner clients want to charge a premium. Failing to meet rental property standards can also lead to penalties and fines, so work with your clients to ensure the homes on your rent roll meet the legal requirements. Remind them it’s worth the investment to avoid a consequence as renters are highly informed and know their rights.
Documentation
It’s easy to allow contracts to expire and roll from month to month, but if you are planning to sell your rent roll, you need everything up to date. Review your agreements and reach out to your clients to re-sign contracts and managing agency authorities as you prepare to sell your rent roll.
Systems and processes
A new owner will find it much easier to absorb your rent roll if there are clearly recorded systems and processes for property managers to work with.
Every time your team does a job they will have to repeat, ask them to create a video showing how it’s done or jot down some instructions. Upload everything to a searchable shared drive so newcomers can hit the ground running.
Review your revenue
Low rental vacancies in Victoria and rising interest rates mean many property owners have already increased their rent, but there may be some who aren’t charging market rates.
As you prepare to sell your rent roll, ensure you’re not leaving money on the table in terms of rent or fees. It's better to have fewer properties with premium fees than an endless rent roll with all property owners paying low rates.
Do some research to check you’re in line with what your competitors are charging. If your rates are higher, you should be able to justify the reason for this.
Invest in and train your staff
If you plan to include headcount with your rent roll, invest in building an elite team. This includes your offshore staff, who should live and breathe property management and customer service the same way your local employees do.
Hire a BDM who can focus on bringing in new clients so your property managers can focus on their day-to-day responsibilities and provide a higher level of service to existing clients.
Gather feedback
Goodwill helps buyers make a decision, so think about your reputation as you prepare to sell your rent roll. Ask happy clients to leave reviews so you have lots of recent feedback on Google, Facebook, etc.
Before you ask for feedback, think about the low-cost steps you can take to improve client experience. For example, ensure every renter and property owner receives a regular ‘touch base’ phone call, and share a newsletter with your clients to keep them updated with property and investor news.
Enter industry awards
Enter your agency and individual team members in industry awards. Even making it to the finals is good for your reputation and credibility, and a great way to set your rent roll apart from the competition.
Keep due diligence in mind
A premium rent roll will sell quickly once the buyer has completed their due diligence. As you build and improve your roll, keep due diligence in mind. For example, all your documents should be stored securely and backed up in the cloud, and you should have copies of all body corporate by-laws.
For a copy of our due diligence self-audit checklist, contact me at rhedditch@bdhsolutions.com.au.
A premium rent roll will fetch a premium price. Don’t forget to loop in your accountant as well as a specialist broker as you build this asset.