Your rent roll valued from your trust accounting records, not from a quoted multiple.

A rent roll is worth what its management income is likely to earn a buyer after the cost of servicing it, allowing for how long that income will last and how well it can be evidenced. A valuer names the income base, measures attrition from your gains and losses records, tests landlord concentration, arrears and agreements, and checks the result against dated, comparable evidence. Agency Valuations does not quote a market multiple without that evidence. Fees are banded on the rent roll's annual management income: $1,495 + GST under $2 million, delivered in 2 business days.

What is a rent roll, and what changes hands when it is sold?

A rent roll is the property management agreements an agency holds, the records needed to service them, and the management income they produce. It is a business asset. It excludes the managed properties, which belong to the landlords, or the money in the trust account: in NSW, trust funds cannot be used for any purpose other than for the client they belong to.

In an asset sale, the buyer acquires the managements the contract covers, to the extent each can move to the buyer. In a sale of shares or units, the buyer takes the whole entity, so the rent roll is valued inside a whole agency valuation. The ATO's goodwill ruling says it does not consider goodwill issues specific to particular industries, naming rent rolls as an example, so tax treatment is for your tax adviser.

Which income does a rent roll valuation start from?

Your trust accounting system reports several kinds of fee income, and they do not carry the same risk. Management fees recur while the landlord stays and the property is let. Letting, renewal and inspection fees depend on events happening again. Recoveries passed through at cost are not income the roll earns.

A valuation names four choices: which fee lines are in the base; which period, the last 12 months or a run rate at the valuation date; whether figures exclude GST; and which managements count.

A hypothetical, with no market evidence implied: two rolls each earn $600,000 a year. One earns $520,000 of it in management fees, the other $410,000. On total income they look the same; on recurring income the first is over a quarter larger. A price quoted as a multiple of "income" means something different for each until the base is named.

What moves a rent roll's value up or down?

Every driver works through one of four channels: how much income the roll earns, how long it lasts, what it costs to service, and how well it can be evidenced.

• ·Number of managements, fee rates, and how much rates vary between landlords
• ·Share of income from recurring management fees rather than letting and other event fees
• ·Attrition, measured by income as well as by count, with the reason each management was lost
• ·Managed properties listed for sale, under offer or under notice
• ·Landlord concentration, including managements held by the principal, family or related entities
• ·Arrears and vacancy trends over the last 12 months
• ·Geographic spread and managements per property manager, which set servicing cost
• ·Property mix: houses, units, commercial and short-stay managements behave differently
• ·Agreement quality: current, signed agreements that support every fee charged
• ·Trust account audit history and monthly reconciliations
• ·Managements recently bought from other agencies, whose retention is unproven

How do state rules affect a rent roll's value?

Rules on agreements, ending a management and trust accounts differ by state, and each changes how certain the income is. Legal conclusions are for your lawyer.

In NSW, Fair Trading states that an agent is not entitled to its fees or expenses unless a written agency agreement is in place and a copy signed by the licensee is served on the client within 48 hours after the client signs. In Victoria, Consumer Affairs Victoria tells landlords that in most cases they can end an agent's management immediately by notifying the agent in writing, after checking their authority. In Queensland, the Form 6 notes say a client can end a continuing appointment, such as rental property management, with 30 days' written notice, or less if both parties agree.

Trust accounts are audited every year. In NSW the audit period ends on 30 June and lodgement is due by 30 September; in Victoria the audit is due within 3 months after 30 June and the report must be lodged within 10 business days of receiving it; in Queensland the report is due within 4 months after the end of the audit period. A late or qualified audit is a risk a buyer prices.

How do retention clauses change what a rent roll is worth?

Rent roll contracts commonly tie part of the price to managements staying after settlement, through a retention period, an amount held back and a clawback for each management lost in the window. Terms are negotiated deal by deal, so we do not quote a typical percentage or period.

Retention terms do not change how much income a roll earns, but they change who carries the risk of losing it. A price paid in full at settlement leaves every loss with the buyer; a large held-back amount with a strict clawback moves much of it to the seller. Two quoted prices cannot be compared until their terms are known.

When do you need a rent roll valuation?

Common triggers include:

• ·Selling or buying managements, in whole or in parcels
• ·Merging the property management departments of two agencies
• ·A partner or shareholder exit where the rent roll is the main asset
• ·Moving a rent roll into a separate entity or to a related party, where market value matters for tax
• ·Finance secured against the roll, where the lender asks for a report
• ·A dispute over a sale, a clawback or an exit, through an expert report
• ·Recording value at 30 June 2027, ahead of the CGT changes that start on 1 July 2027

What do we need from you?

Most of it runs straight from your trust accounting system: a schedule of every management at one date, 12 to 24 months of monthly fee income by fee type, a gains and losses report with reasons, arrears and vacancy reports, a sample of signed agreements, recent trust account audits, and staff and cost details. Use landlord identifiers, not names. Our rent roll data checklist sets out every field.

What does a rent roll valuation cost?

A rent roll on its own is banded on its annual management income, excluding GST: $1,495 + GST under $2 million, delivered in 2 business days; $2,495 + GST from $2 million to $3 million, 3 business days; $3,495 + GST from $3 million to $10 million, 3 business days; above $10 million, quoted in writing before work starts, with the delivery date agreed before commencement. If the whole agency or its shares are valued, the band follows total annual turnover instead. An expert report for a dispute is $4,495 + GST.

Each past valuation date adds $495 and each additional entity adds $795. Delivery time starts once payment and all required information have been received. A suitably qualified business valuer signs every report, which follows the guidelines of APES 225 Valuation Services. We value rent rolls; we do not broker or sell them.