How are Rent Roll Valuations prepared?

Although there is no "one size fits all" method for determining rent roll valuations, the actual valuation process is very well defined. The annual management fees are applied to a Rent Roll Multiplier (RRM). When you consider that quite often in the world of real estate, it is the rent roll that is the significanr part of the value in the business, it is  crucial that the rent roll valuation is corectly perpared.

Annual management income is the total income from management fees and rent collection excluding GST, for a period of twelve (12) months, for each property. The ancillary fees (i.e. advertising fees, administration fees, inspection fees,  re-letting fees) are omitted.

The Rent Role Multiplier is derived from a number of factors affects the rent-roll. For instance, although the ancillary fees are not included in the overall management income, they do have a bearing on the Rent Roll Multiplier.

Rent roll Valuations

Factors affecting Rent Role Multipliers

  • Occupancy rate
  • Average rental
  • Term of Contract
  • Number of rentals
  • Type and condition of properties
  • Arrears rates
  • Vacancy rates
  • Due diligence
  • Current court actions

 

  • Type of lessor
  • Time rent roll has operated
  • Staff and wages
  • Supply and demand
  • Geographical spread
  • Landlord : property ratio
  • Ancillary fees and charges
  • Current interest rates + economy
  • Rent guarantee arrangements
  • Compliancy to legislation

 

Rent Roll Valuations and Valuing Rent Rolls can be a very extensive process. If you are thinking of selling a rent roll or would like to discuss the possibility of obtaining a rent roll valuation, contacting us for a confidential discussion is the first step  to obtain a professional valuation of your portfolio. Business Reports and Values can provide you with a comprehensive rent roll valuation at a very competitive price. We have the qualifications and experience to provide a quality  valuation report for any requirement.

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