2025 will be the year for rent roll acquisitions as forward-thinking agency owners take advantage of the opportunities presented by the shifting market.
The property management landscape in Melbourne has been in flux lately due to legislative changes and economic pressures.
Updates to rental property taxes, changes to minimum standards and no-fault evictions being banned have many property owners concerned about how long they can hold onto their investments. Meanwhile, high interest rates have eroded profits and impacted the potential for capital gains.
However, instead of deciding property management is becoming too hard because of these issues, it’s possible to see opportunities.
Find out why savvy agency owners will buy rent rolls in the new year:
We’re on the brink of a peak in buyer activity
Most industry experts say Melbourne’s property market underperformed in 2024. Prices stagnated due to high interest rates and a lack of buyers.
This means the market is poised for a correction.
Expanding your rent roll at the start of 2025 gives you the chance to tap into a pool of vendors.
If you keep in touch with your clients, ensure they are informed about how you help with sales and deliver a good experience on the rental property side of things, they will be much easier to sign on as vendors when their needs change.
Buy a rent roll, and you can potentially have one side of your business feeding the other - if your buyers are investors, you will have the opportunity to hold the home as a PUM. There is also the potential for renters to become buyers; this makes the sales process faster and more profitable.
Population growth is forecast
The first rule of business is to provide something people need, and real estate certainly does this.
The rental market is still tight, and the population is set to increase in Melbourne as it progresses to 8 million people by the year 2051. A large rent roll is an opportunity to generate income, so take a wider perspective and think about how your agency can serve the needs of this expanding client base.
Efficiency is power
Incoming legislative changes have hit some agencies and property owners hard, pushing the imbalance of effort and returns too far in the wrong direction. Those who aren’t prepared and organised may be ready to raise the white flag and step away from it all.
This creates a fantastic opportunity for well-organised, efficient property management agencies. Once you have found the sweet spot of PMs and PUMs, it will be easy to scale by optimising outsourced teams, automation and artificial intelligence, and applying your systems and processes to achieve more with less.
Read more: How property management is changing
Should you buy a rent roll in 2025?
Savvy business owners act when the market is slow to take advantage of lower costs, less competition and having the upper hand in negotiations. If you are thinking of expanding your rent roll, the beginning of 2025 is an excellent time, particularly as some agency owners are reconsidering the future of this part of their business.
Some questions to ask before you start your search include:
How many PUMs can I take on?
Where do I want to buy?
What kind of loan or funds can I access to make a purchase?
Will I acquire staff as well as PUMs?
Will a rent roll purchase help me meet my long-term goals?
You still need to ensure you have professional support. A broker who specialises in rent rolls can help you find a roll which aligns with your strategy. You’ll also need a lawyer with experience in this area, a broker to arrange your loan and the help of a valuer who can ensure you don’t pay too much.
If you buy well, you have the potential to set your agency up to deliver the profits you need to create a robust, sustainable and rewarding business.