Organic growth of a rent roll Pros and cons of growing an organic rent roll

Pros include

  • Cashflow injection
  • Increased sales commission opportunity for sales side of the business if applicable
  • Often it is easy to add value to a rent roll being purchased
  • Profitability increase when merging outgoings of a business ie; administration, commercial lease, cost of software
  • Increase in new business referrals from marketing in place if this part of the business is acquired ie; website, social media, etc.
  • IP gained on acquisition is a pro that is often overlooked but a very real “Pro”

Cons include

  • Taking on a “dirty book” can be rather painful and costly in terms of time and energy to clean it up
  • Attrition or loss risk of clients during acquisition as there are many factors that must be handled carefully during a rent roll acquisition
  • Taking on staff that are not at the same level as your own in terms of knowledge and skill set. Also, bringing different teams together can be culturally challenging.
  • Employing a BDM is often challenging. A lot of time and expense is involved in employing BDM’s, sometimes without the necessary return on investment.

Published on 03/23/2018

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About the author

Hamish has over 17 years of experience within the property management industry and has experience throughout New Zealand and Australia as a manager, principal and consultant. He utilised all of this experience to form a property management business that he expanded between 2009 and 2016 into 7 locations around New Zealand.

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