Is 2023 the year when you sell all or some of your rent roll? Here’s how to facilitate a smooth transition to the next phase of your agency ownership journey.
2023 is a good time for a rent roll exchange as agents examine where their business has the potential to be most profitable.
If you’re preparing to sell, it’s actually not a bad time. Low vacancy rates mean property management businesses are looking to boost their numbers in bulk rather than relying on word of mouth or business development.
Here are some tips to help you sell your rent roll this year.
Be flexible on payment terms
As the vendor, you have the option to create conditions to make the deal attractive to your buyer. For example, you could offer staged payments to take place over a few years. This will save the borrower from taking on a high interest rate from a lender and being stuck with it while they make repayments.
This is more than possible, it simply has to be clearly stipulated in the terms and carefully checked by both parties’ lawyers.
While being flexible is important, unless you are having trouble selling, you don’t have to offer these compromises early on. Work with your broker to discuss what you are open to and form a strategy.
Include staff as part of the transaction
Transferring a rent roll can work better when staff are included because property managers are difficult to come by in today’s market.
If you have built a reliable, efficient team who can work independently and are loyal to the business, you’ll have a better chance of a quick sale and a good price.
It may take some groundwork to upskill your team, but if you have a plan to sell your rent roll at the end of the year and exit your business, there is definitely time to do this and your endeavours will be worthwhile.
Good property managers value ongoing training, regular weekends off, efficient systems and the support of remotely-based team members (in The Philippines, for example), to take care of administrative tasks. If they can be assured of similar support as part of the transition to a new owner, they are likely to stay in their job.
If you are retiring or moving onto new ventures, including your staff as part of a sale package will ensure they retain their jobs, which should be welcome news for them.
Check your systems
Speaking of efficiency, a rent roll which runs ‘lean’ will be more appealing to buyers. The more properties you can allocate to each property manager, the better, but you do need to ensure they don’t become overwhelmed to the point where client satisfaction suffers.
Running lean and making the most of a small but productive team comes with the help of clear systems, smart online platforms, templates and automation. It also requires up to date policies so people know how to respond to different situations.
Review your management authorities
You may believe you have a certain number of properties on your rent roll, only to realise several contracts have expired. Before you list to sell in 2023, ensure every client agreement is up to date.
Double check compliance
The other thing to think about is compliance. Your buyers will want assurance all your rental properties are up to date with the latest legislation when it comes to things like security, heating and fire alarms.
If you can provide clear, documented evidence to prove this is the case, all the better.
Have financial documents ready
You need to be prepared ahead of a property sale. Work with your accounting and administrative team to ensure you have the necessary records and paperwork to prove the value of your rent roll.
Prepare to be flexible
Rent roll brokers have a range of buyers on their contact lists, each with different goals. A match may be possible if you are willing to be flexible with the arrangements and conditions of your sale. Be open to suggestions and have an end goal in mind but allow yourself some flexibility with how you get there.
Need help to sell your rent roll in 2023?
BDH Solutions are your expert rent roll brokers. Talk to us to find out more.