Thinking of expanding your real estate agency this year? It’s a great time and there are plenty of opportunities out there.

Despite border closures and lockdowns, Australia experienced a lack of available rental properties in 2021. 

As reported by the Sydney Morning Herald, the national vacancy rate hit a multi-year low of 1.5 per cent in November. 

Even Melbourne, which has some of the highest vacancy rates in the country, only has three per cent availability. Meanwhile, in Sydney, vacancy is hovering at around two per cent. 

Other capital city vacancy rates include:

• Perth (0.5 per cent)

• Hobart (0.3 per cent)

• Adelaide (0.4 per cent)

• Brisbane (1.2 per cent)

With international borders opening up again, students are set to return to Australia from overseas, further increasing the demand for small apartments. Then there are renters who moved back in with their folks during the pandemic. The end of lockdowns will see them out hunting for somewhere to live. As a result, vacancy rates will drop even further.

This means 2022 is an excellent time to invest in a rent roll purchase. 

Why purchase a rent roll in 2022

Low vacancy rates means more competition between renters. This means higher prices, especially for quality homes. Your agency has the potential to work with landlords, showing them how to improve the value of their investment so they can charge a healthy price. As you know, this adds to revenue and profits. 

Lack of stock on the market for renters is good news for real estate agencies but is only one of the reasons to consider expanding your rent roll or adding a property management arm to your agency. 

Low interest rates is another incentive. While money is ‘cheap’, your potential to profit from a rent roll purchase is higher. It makes more sense than relying on organic growth which, even if successful, is slow.

Speaking of interest rates, they are tipped to rise towards the end of the year. This will put an end to the incredible boom in home sale prices witnessed during 2021. To protect your agency from loss of income caused by fewer active buyers, it makes sense to have a healthy property management division. 

Having a healthy rent roll also tips into sales success. No matter what is going on in the world, people always need to sell homes. If you have a strong rent roll, you have the best odds of assigning one of your agents to a landlord client who is ready to sell their investment. You also have a long list of renters, many of whom are steadily working towards a property purchase. These can be nurtured as qualified buyers. 

If you have a long term plan to sell your business or transition away from it, you need it to be as valuable as possible. Start work towards this goal now by acquiring assets so you have more choice and flexibility in the future. 

Purchase with care

Even though it is an excellent time to purchase a rent roll in Australia, seek support and quality advice so you avoid overspending. With the help of a quality broker, accountant and solicitor, you’ll be able to complete your due diligence and ensure you’re getting long term value for money. 

If you are planning a rent roll purchase, it’s also time to think about your practices as an employer. You’ll either need to ramp up efficiency so your current team can cope with demand, find new team members, or think about making your workplace appealing so you don’t immediately lose any staff you acquire. 

Now may be the time to start upskilling administration staff or launching a marketing campaign to recruit star team members. With the right people to support the right rent roll, you’ll be able to generate more profits, sooner. 

Want to buy a rent roll in 2022? Talk to BDH Solutions.

BDH Solutions are rent-roll agents with over 40 years experience in connecting the right vendor with the right purchaser. Download our information booklet on the new Victorian Minimum Living Standards Legislation