Factors that influence the value of a rent roll

There are a number of factors that influence the value or worth of a rent roll. We have listed below a checklist for your reference;

1.       Number of properties under management

2.       Number of landlords

a.       Number of multiple landlords

b.      Number of owner related properties

3.       The % of commission obtained each property

a.       Trust system report only give averages of entire rent roll

4.       Geographic spread of properties

5.       The $ of management fees per property per annum

6.       Management fees - $per annum

7.       Letting fees for last 12 months

8.       Sundry fees for last 12 months

9.       Type of properties under management

10.   Length of time each property managed

BDH Solutions are rent-roll agents with over 30 years experience in connecting the right vendor with the right purchaser. To stay up to date with our latest listings, register here.

Confidentiality agreements

Confidentiality agreements (also called nondisclosure agreements, confidential disclosure agreements, and secrecy agreements) are contracts that govern the disclosure of confidential information by one party (the disclosing party) to another party (the receiving party). Confidential information is exchanged for a promise of secrecy. The disclosure may be unilateral, bilateral or multilateral. Confidential information disclosed in a confidentiality agreement might pertain to Intellectual Property and information of the seller.

The confidential information has value precisely due to the fact that is known to only a few, that is, open disclosure will be injurious to this value. Disclosure of this information is often totally against the owners’ interests. The owner may be that their customers, suppliers and staff are not aware that a sale is contemplated until much later in the process. The owner also needs to be assured that any prospective buyer has the background experience, skills, and financial resources to successfully buy and run the company.

Safeguarding confidentiality is a major issue for business brokers. A confidentiality agreement can either stand alone or be included as part of a broader agreement. An appropriately drafted confidentiality agreement should contain a list of standard provisions and exceptions. In special cases, where the disclosing party wishes to carefully protect the confidential information, the agreement might also include extra strong clauses and articulated security provisions.

BDH Solutions are rent-roll agents with over 30 years experience in connecting the right vendor with the right purchaser. To stay up to date with our latest listings, register here.

Buyers and Sellers need to be aware of the factors that influence value.

There isn't a blanket formula that you can apply to rent rolls in arriving at a price.

There are a number of factors that influence the value of a rent roll;

1. Number of properties managed

2. Ratio of landlords to properties

3. Geographic spread of the properties managed

4. The commission rate

5. Amount of sundry income charged such as letting fees, postage etc

6. Length of time each property has been managed

BDH Solutions are rent-roll agents with over 30 years experience in connecting the right vendor with the right purchaser. To stay up to date with our latest listings, register here.

Why buy an existing business?

If you buy an existing business, you can analyse the profit and loss statements and balance sheet of the Company you are buying. This is an advantage because you see firsthand what you are getting in, particular the income streams of the business and the individual expenses of the business.

In addition to this you have a going concern producing revenue, with staff, brand, systems and an infrastructure in place. In essence you are making money from the day you settle.

When you start a business from scratch, you must secure and fit out a premise, build the systems, web site, arrange plant & equipment, hire and train staff- all of this before you begin to earn an income.

Statically most start up businesses struggle to make a profit and in some cases fail within 3 years from commencing. Experience would say that starting up a business require an enormous and of persistence & resilience but above all a bullet proof business plan.

BDH Solutions are rent-roll agents with over 30 years experience in connecting the right vendor with the right purchaser. To stay up to date with our latest listings, register here.

How long should the retention period be when selling a rent roll?

Naturally the vendor will want shortest time and the lowest amount and the purchaser will want the longest time and the highest amount.  So therefore what is reasonable?

I am suggesting that an amount of 10-15% of the purchaser price to be held in Trust as the retention sum for a period of up to and no more than 6 months. In most of the transaction that have been negotiated, the retention period has been 3 or 4 months.

The interest received on the retained amount should be divided between vendor and purchaser.

BDH Solutions are rent-roll agents with over 30 years experience in connecting the right vendor with the right purchaser. To stay up to date with our latest listings, register here.