Macquarie Relationship Banking has launched an online property management "toolkit" to help principals bolster their rent roll’s earning capacity and build a stronger overall business.
“The online toolkit aims to support our clients to build their rent roll into a valuable and saleable asset, which, among other things, provides a strong database of investors for sales, and equity for continued business growth,” said Shaun Bassett, national head of Macquarie Relationship Banking’s residential real estate segment.
According to Macquarie Relationship Banking, the toolkit guides agencies through a number of steps, from understanding the drivers of rent roll value and the pros and cons of different growth strategies, to focusing on financial considerations, such as what a principal might expect from a bank and what a bank may look for when carrying out credit assessments.
The toolkit features simple tips for growth, alongside a variety of calculators, which focus on rent roll valuation, fixed costs coverage, a business’s break-even point and current equity position.
Mr Bassett said the calculators were developed to help principals practically apply the toolkit content to their own business.
“No two real estate businesses are the same and it can often be difficult to accurately apply information about growth strategies to an individual business,” he said. “With our toolkit, the aim was to make the content as useful and practical as possible, adding real value to our clients and their businesses.
“The rent roll valuation calculator, as an example, provides an estimate of the current value of a rent roll and allows different variables to be manipulated, such as property management commission rates, average rent per week and the number of properties under management, to demonstrate how these factors may impact the rent roll value.”
According to Macquarie Relationship Banking’s 2012 Residential Real Estate Benchmarking Report, property management now accounts for around 42 per cent of an agency's overall revenue, up from 36 per cent in 2009 and 29 per cent in 2007.
The report also found that the average rent roll in Australia has grown from 375 in 2009 to 436 in 2012, in terms of properties under management (PUM). There is also a strong correlation between profitability in agencies and PUM, with larger portfolios being more common as profitability increases.
Mr Bassett said the toolkit was a natural extension of Macquarie Relationship Banking’s specialist focus on residential real estate.
“This is what we talk to our clients about every day, and we have brought together our expertise into a simple and user-friendly format that clients can access at their convenience,” he said.
“The toolkit represents the collective knowledge and insights of our team of specialist relationship managers, who work with more than 1,000 residential real estate clients, responsible for more than 400,000 properties under management.”