1. Lots of agents want to buy a rent roll. I’ve spent time in most corners of Queensland this year and there’s a common theme: sales of rentals in the last 2 years have eaten away at rent rolls and many business owners want to plug that gap with an acquisition. My monthly emails always lead to calls and emails and the buyer appetite ranges from 50 to 500 properties. Demand seems to be strong in most markets.
2. Not many agents are ready or able to buy a rent roll. There’s plenty to organise as an intending buyer. We talk a lot about finance but team capacity (especially having the right senior PM/department leader), office space and resources all need to be sorted. I’ve heard quite a few stories already of rent roll transactions that didn’t go far because a buyer wasn’t properly qualified before the deal started. Often the seller knows and likes the potential buyer and the tough questions simply don’t get asked.
3. It’s lonely being a real estate principal. Most have good working relationships with their teams. I’m often surprised that lots of principals really open up and enjoy talking with me though, chatting through their business challenges. Staff can’t relate in the way another agency owner can – and I’m no longer a competitor so I hear plenty of raw truths. (I love this part of my work and that’s no surprise to me.)
4. Confidentiality really isn’t taken seriously. I knew information is currency in the rent roll/agent sales world. But I’ve been shocked how widely some really important business details get shared, including with competitor agencies. In the rush to engage a buyer prospect some brokers ignore the importance of confidentiality agreements. Franchisors quickly shift focus to replacing the seller’s place in their customer list before they’ve even gone to market. Sometimes it’s agents outing themselves as they look to save money and sell without a broker. The risks to an agency, the losses of properties and team members, can amount to extraordinary sums. People are too casual.
5. Agency owners can take years to make the selling decision; But once the Form 6A is signed they want it done now! I thought it was only me that gave serious thought to selling for probably 3 years before I pulled the pin. I hadn’t realised how many other principals take this long, stalling by ignoring or avoiding the part of our jobs we don’t enjoy. For me it was staff leadership: I loved it until I really, really didn’t love it! Once we make the decision and open our minds to possibilities for “the life after”, we’re fairly impatient sellers! And that’s okay. I’ve been there and I get the urgency.
6. Everyone still focuses on the multiple/price but it’s not the key to the best result. Yes the multiple is applied to your management fees to determine a settlement price. But how many properties are lost pre and post settlement because this buyer is not the best match for your landlords? Or they’re not trustworthy and don’t do what they say they’ll do, beyond what the contract can contemplate. Rent roll sales are nothing like house sales and I’m surprised there’s so much focus on the initial price. Not enough on the net result.
7. A final surprise for me: I actually enjoy door knocking and phone prospecting! I can admit it had been years since I last did it as a salesperson, but selling a rent roll at a premium result means connecting with lots and lots of potential buyers. I made my first sale early this year to a buyer I found on a door knock so I’ve been doing plenty more. To be fair it’s not like cold calling home owners, and the vast majority of agency owners are happy to chat.
I’ve had a lot of fun in my first year as a rent roll broker and the support of my clients has been extraordinary. So much so that I recently took out the Salesperson of the Year gong for Honeycombe Agency Services with record sales volumes!*
* I should point out I am the only salesperson. In fact I’m the only team member. Did I mention I fell out of love with staff leadership?!
Thank you for reading throughout 2024. Enjoy your hard-earned break and I hope 2025 is both a personally and professionally rewarding year for you.
If you’d like to sell or buy in 2025, or just explore the options, I’d love to have a confidential chat with you. Please call me on 0423 332 022.