How to Value a Rent Roll for Sale

For a real estate business, the Rent Roll is the "superannuation." It is the most valuable asset you own. Valuing it correctly is critical.

The Multiplier Method

Rent rolls are valued based on a multiple of their Annual Management Income (AMI).
Currently, quality rolls sell for 2.8x to 3.5x their income.
Example: A rent roll generating $500k in management fees might sell for $1.5 million (3x).

Factors Affecting Value

• Average Management Fee: Higher is better. A roll averaging 7% is worth far more than one averaging 5%.
• Geographic Concentration: Properties close together are easier to manage and worth more.
• Arrears & Vacancy Rates: Low arrears indicate a well-managed roll.