Quality rent rolls make profitable businesses and securing a better finance deal will make all the difference when it comes to success.
The key to a better finance package is knowing which bank or lender wants your business here and now and that’s where we can help.
We work with over 60 well respected banks and lenders everyday and we know who’s going to look at your rent roll business favourably, so you’ll get a better finance deal.
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The cost of finance for a rent roll business can differ greatly from one bank to another. It is not unusual to negotiate interest rate variations of up to 2-3% depending on the business case.
Your Green Team Finance Broker will provide an overview of lenders that will work for you, guide you through the purchasing process, and mitigate unnecessary delays that can impact loan approval and settlement timeframes. We can answer all your questions, including:
We can even assist you to obtain a valuation on your new rent roll.
As a general guide you can expect to borrow approximately 2.5 times the business earnings before interest and taxes, depreciation, and amortization (EBITDA).
LVR: Some banks will require a 40% loan to value ratio whilst others lend up to as much as 60% – and this changes regularly. To borrow more than 60%, you can consider securing a guarantor or offering additional assets as security.
Keep in mind some banks won’t even look at your opportunity if the value is less than $500k.
A Rent Roll Multiplier (RRM) is a formula used to calculate the estimated selling price of a rent roll. This is usually a multiplier of the annual management income for each property.
Annual management income is the total income from management fees and rent collection excluding GST, for a period of twelve (12) months, for each property with a legislatively compliant PAMD20a. It traditionally excludes income from ancillary fees (ie. re-letting fees, administration fees, advertising fees).
Income = $ Rent per week ÷ 7 days x 365 days
x management fee & rent collection commission % (ex GST)
Once an overall average annual management income has been calculated and the rent roll statistics assessed a multiplier is applied. There is no such thing as a ‘one size fits all’ multiplier. The multiplier generally varies from 2 to 3 but in some cities it can be as high as 3.5 to 4. The multiplier varies across rent rolls and locations and is affected by numerous other factors including:
We have a proven track record in the property management industry and work with a range of complementary professionals who can assist you with this process (i.e. rent roll brokers, tax advisors, business advisors). Simply give us a call and we will be happy to point you in the right direction.
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Australia's leading hospitality, accommodation and childcare finance specialist and winner of Australian Broker of the Year 2022.
Finance Consultant
An award-winning small business and franchise finance specialist who's on your side when it comes to finding a better finance deal.
Green Finance were absolutely awesome and I can't rate them highly enough. They assisted in every way possible, were completely reliable and everything was always completed in a timely manner. I would recommend Daniel Green as a very professional broker. The process was simple and seamless plus he achieved an outstanding result which was ultimately a life changer for me.
Daniel Green and his team know their stuff when it comes to finding the best deal and I know I can trust their recommendations without hesitation.
Fantastic to deal with - Sarah really knows her stuff.
