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

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