Agency valuation questions, answered.
26 questions agency owners, buyers, accountants and lawyers ask about valuing a real estate agency, a rent roll, an insurance brokerage, a mortgage book or another kind of agency, each answered in a few sentences by Agency Valuations. Every answer links to the page that sets out the reasoning in full. Last reviewed .
What an agency valuation costs and how long it takes
Agency Valuations publishes its fees. The fee is fixed in writing before work starts and is set by the annual revenue of what is being valued.
How much does it cost to value an agency, rent roll or book?
Agency Valuations charges a fixed fee set by the annual revenue, excluding GST, of what is being valued: $1,495 + GST under $2 million, $2,495 + GST from $2 million to $3 million, and $3,495 + GST from $3 million to $10 million. Above $10 million the fee is quoted in writing before work starts. An expert report for a dispute or court is $4,495 + GST at any size. The fee never depends on the value the report reaches.
Which revenue figure sets the fee for a rent roll or a book?
It depends on what is being valued. A rent roll on its own is banded on its annual management income. An insurance or mortgage book on its own is banded on that book's annual recurring income. A whole agency, or shares or units in it, is banded on the agency's total annual turnover. All figures exclude GST. An agency on exactly $3 million is Medium, and on exactly $10 million it is Large.
Are there extra costs on top of the fixed fee?
Only two published add-ons: +$495 for each retrospective (past) valuation date and +$795 for each additional entity, such as a rent roll held in a separate company or trust. Any add-on is agreed in writing before work starts, never added afterwards. There are no disbursements and no charges for emails or phone calls.
How long does an agency valuation take?
Where the annual revenue of what is valued is under $2 million, the report is delivered in 2 business days. From $2 million to $10 million it is delivered in 3 business days. Above $10 million, and for an expert report for a dispute or court, the delivery date is agreed before commencement. Delivery time starts once payment and all required information have been received.
What does an expert report for a dispute or court cost?
An expert report for a dispute, mediation or court is a fixed $4,495 + GST, whatever the size of the agency, rent roll or book. It is written to be tested by the other side: instructions, assumptions, evidence and reasoning are set out in full. The delivery date is agreed before work begins, and delivery time starts once payment and all required information have been received.
Real estate agencies and rent rolls
How is a rent roll valued?
A rent roll is valued on the income its management agreements are expected to keep producing for a new owner. The valuer looks at the annual management income, the mix and quality of the properties, how long landlords have stayed, how concentrated the roll is, the fees charged and the cost of servicing it. Rules of thumb are tested against that evidence rather than applied on their own. From $1,495 + GST where the management income is under $2 million.
What makes one rent roll worth more than another?
Value rises with income that is likely to stay: landlords who have been with the agency for years, properties close together and easy to service, fees at or above local norms, clean records and signed management agreements. It falls with concentration in a few landlords, a large share of properties likely to be sold, discounted fees, poor records or a roll that depends on one property manager.
What is a retention clause in a rent roll sale?
A retention clause links part of the price to the managements that stay with the buyer for an agreed period after settlement. Part of the price may be held back, or the price adjusted, for managements that are lost in that period. The terms are agreed between buyer and seller, so the clause should be read alongside the valuation, which states whether it assumes any retention adjustment.
How is a whole real estate agency valued, not just its rent roll?
A whole agency is usually valued on its normalised earnings, with the rent roll, the sales business and any other income streams considered separately because they carry different risks. Recurring management income is generally more secure than sales fees, which depend on the market and on individual agents. The fee is set by the agency's total annual turnover, from $1,495 + GST under $2 million.
What do I need to provide for a rent roll valuation?
Usually a property and landlord list with management fees and start dates, at least two years of management income, details of properties lost and gained, the agency fee schedule, sample management agreements and the cost of running the property management department. The rent roll data checklist sets out each item and why it matters.
Insurance brokerages, mortgage books and advice practices
How is an insurance brokerage valued?
An insurance brokerage is valued on the brokerage income and fees its book is expected to keep earning, after the cost of servicing it. The valuer tests how much of the income renews each year, the spread across clients and insurers, the classes of business, the reliance on key account managers and any agreements that limit how the book can be transferred.
How is a mortgage broking book valued?
A mortgage broking book is valued mainly on its trail income: what the existing loans are expected to keep paying, for how long, and at what cost to service. Loans that are refinanced, repaid or moved elsewhere stop paying trail, so the valuer looks closely at how long loans in the book have tended to stay, the lender mix and the terms of the aggregator agreement.
Is a valuation of a financial advice practice financial advice?
No. A valuation states what a practice, or an interest in it, is worth at a date, with the reasoning. It is not advice on whether to buy, sell or invest, and it is not financial product advice. Agency Valuations does not hold an Australian financial services licence and gives no such advice.
Marketing, recruitment, travel and other agencies
How is a marketing or digital agency valued?
A marketing or digital agency is usually valued on normalised earnings, with close attention to how much revenue comes from retainers rather than one-off projects, how concentrated the client list is, and whether clients follow the agency or particular people in it. Agencies with recurring retainers spread across many clients tend to be worth more than project-based agencies of the same size.
How is a recruitment or labour hire business valued?
A recruitment or labour hire business is valued on normalised earnings, with the placement fees and the on-hire margin looked at separately. The valuer tests client concentration, the depth of the candidate and contractor base, the dependence on individual consultants, working capital needed to fund payroll, and how the business has performed across hiring cycles.
How is a travel agency valued?
A travel agency is valued on the earnings it is expected to keep producing: booking income, supplier income and service fees, after normalising owner salaries and one-off items. The valuer looks at the mix of corporate and leisure clients, repeat bookings, dependence on the owner or key consultants, supplier and network agreements, and client money held for future travel.
What is key person risk in an agency?
Key person risk is the chance that revenue leaves when a particular person does, usually the owner or a senior agent, broker or consultant who holds the client relationships. The more the revenue depends on one person, the less a buyer will pay for it, unless that person stays on or the relationships are transferred. A valuation identifies that dependence and reflects it.
Why can a rule-of-thumb multiple mislead?
A rule of thumb is an average of past deals that may not be like yours. It ignores how secure your revenue is, how concentrated your clients are, what the agency costs to run and who the relationships depend on. Two agencies with the same revenue can be worth very different amounts. An independent valuation tests any multiple against the evidence for your agency.
Buying, selling and partner changes
Is a broker appraisal the same as an independent valuation?
No. A broker appraisal is an opinion of the price a business might sell for, usually prepared to win a listing, and the broker is usually paid when it sells. An independent valuation is a written report on market value, prepared by a valuer with no part in the sale and a fee fixed before work starts. Buyers, lenders and advisers generally give it more weight.
Should I get a valuation before buying an agency or rent roll?
A valuation tells you what the revenue you are paying for is likely to be worth to you, tested against the client records, rather than what the seller is asking. It helps you negotiate, structure any retention clause or earn-out, and support a finance application. From $1,495 + GST where the revenue of what you are buying is under $2 million.
How are earn-outs valued in an agency sale?
An earn-out makes part of the price depend on how the business performs after the sale, often on revenue that stays. A valuation looks at how likely the targets are to be met, how the payments are timed and who controls the results after settlement, so both sides can see what the deferred part of the price is likely to be worth today.
How is a partner exit from an agency valued?
A partner exit usually needs the value of the whole agency first, then the value of the departing partner's interest under the shareholder or partnership agreement. The agreement may set the basis of value, the valuation date and whether any discount applies. An independent valuation gives both sides a number they can rely on, from $1,495 + GST where agency turnover is under $2 million.
How do I choose a valuer for an agency?
Look for a valuer who is independent of the deal, publishes or fixes the fee before work starts, explains how the revenue figure is tested, and shows the method and assumptions in a written report. Ask whether the report follows the guidelines of APES 225 Valuation Services and who signs it. Be wary of a value given before any records have been looked at.
Tax, CGT and 30 June 2027
Is selling my agency or rent roll a CGT event?
Usually yes. Selling an agency business, a rent roll or shares in an agency company is generally a disposal of a CGT asset, which is CGT event A1. Transfers to a related party can also trigger CGT, and the market value may replace the actual price. Your accountant confirms the tax treatment; a valuation provides the market value evidence.
What changes for capital gains on 1 July 2027?
From 1 July 2027, for individuals, trusts and partnerships, the 50% CGT discount is replaced by cost base indexation plus a 30% minimum tax on capital gains, for gains accruing after that date. Individuals and trusts are treated as selling and reacquiring their assets at market value just before 1 July 2027, so the valuation date is 30 June 2027. Companies are unaffected, and the small business CGT concessions are unchanged.
Do I need a valuation of my agency at 30 June 2027?
Not necessarily. A market valuation at 30 June 2027 may be useful to set the value at which you are treated as reacquiring your agency, rent roll or shares, but an apportioning method is an alternative. Ask your accountant which suits you. A valuation uses the published fees, from $1,495 + GST where the revenue of what is valued is under $2 million.
Talk to a valuer
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Small Business Valuation
$1,495 + GST
For an agency, rent roll or book with annual revenue of what is valued under $2 million. A written report, delivered in 2 business days. Delivery time starts once payment and all required information have been received. The fee is fixed in writing before we start and never tied to the value we reach.
Larger agency or book? Tell us in the form and we recommend the right package. All fees