DUE DILIGENCE ON RENT ROLL PURCHASE

Independent purchase review for the purchase of rent roll is necessary before purchasing

Most agent require independent purchase review for the purchase of rent roll, but before embarking on purchasing a rent roll. You should also review the merits of natural rent roll growth versus buying a rent roll as both methods of growth have advantages and disadvantages.

ADVANTAGES

You can control quality location and fees of properties
You can avoid bad landlords
No inheritance problems.
Increase size gives business momentum
Eliminates a competitor from your local area
Increase networks and database
More opportunities for the sales department

DISADVANTAGES

Slower growth
Rent roll loses money until numbers grow
Buying existing issues, more often when poorly run
Integration issues (software and staff)

DUE DILIGENCE REVIEW

Rental management is the most important aspect to any agency; during a due diligence we review the following area:

Total management fees collected.
Total sundry fees collected.
Rent increase.
General or routine inspections.
Outstanding maintenance.
Arrears or part payments.
Geographical spread and vendor with multiple properties.
Net growth over the last few years
Key ownership
Vacancies