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REIQ Journal : February 2010
You can fast-track income growth by buying a rent roll but are you aware of the potential pitfalls? It’s wise to seek specialist advice before seeking finance for a rent roll acquisition. ThERE’S noThInG lIkE having additional revenue in your business, and in real estate the classic standby is having a rent roll. Other revenue streams for a modern real estate office include financial services such as mortgages and insurances – offering upfront and trail incomes for the life of the loan are becoming accepted as the norm. In addition to being a welcome diversified income for the real estate office, a rent roll provides another link to the local community and today’s renter could also be tomorrow’s buyer, so in these uncertain times a rent roll income stream could be very useful. Although, a rent roll isn’t for everyone. There is the risk of legal problems, the cost of staff needed to administer the rent roll and just the general need for resources, technology and organisation required. When it comes to looking after a rent roll, good systems need to be in place. Building up a rent roll is not the most high- profile, nor the most rewarding job in an agency. But building up a good reputation in the area helps. And the administration systems that are necessary can also help create a sense of best practice for the rest of the agency in terms of keeping costs down and increasing profit margins. Rather than expanding your rent roll which, although a worthwhile activity, can take time, you may wish to consider purchasing a rent roll to generate additional income immediately says Gary Lees, managing director (sales) of Australian Real Estate Finance Group, a real estate specific brokerage business with mortgage brokers operating in all seven states. Gary’s key expertise is facilitating the funding of rent rolls for principals wishing to grow their property management business. Despite the many advantages of having a rent roll, there are now a growing number of business owners wishing to sell their small Buying rent rolls makes dollars and sense By Jess Wheeler, Managing Director, Outsauce REIQ Journal February 2010 44 Property Management
December January 2010