What a rent roll costs, and why banks love them
Rent rolls are the purest recurring-revenue acquisition in Australian small business: hundreds of management agreements paying every month, and a market so standardised it prices in dollars-per-dollar of income. They are also one of the most gearable purchases a lender will look at. Here is the whole market in one page.
How rent rolls are priced
| Market | Multiplier (per $1 of annual management income) |
|---|---|
| National working range | $2.00 to $3.60, most deals $2.50 to $3.50 |
| Sydney | ~$3.30 to $4.10 |
| Melbourne | ~$3.30 to $4.00 |
| Brisbane and Perth | ~$2.80 to $3.60 |
| Bank valuers' benchmark, good quality book | ~$2.60 to $2.80 |
Live examples run the same way: a 160-property Brisbane book asking $1.2m at $2.90 per dollar, Victorian commercial portfolios at $3.25. Demand is strongest for books of 100 to 500 properties. What moves the multiplier is a known list: landlord concentration, arrears, average rent and fees per property, geographic spread, whether the book grows or bleeds, the quality of the management agreements, and how much of it walks out the door with one property manager.
The retention structure
Rent roll deals settle in two pieces: typically around 80% on settlement for the management agreements that transfer, and the balance held back for four to six months against retention, landlords who leave early come off the price. It is the market's built-in warranty, and it is why the transfer process and landlord communication plan matter as much as the multiplier.
Why banks love them
This is the standout: rent rolls are one of the few goodwill assets with published bank lending policy. One major bank publishes gearing up to 80% against a suitable rent roll, minimum 100 residential managements, terms to ten years; across the wider market, 50 to 65% is the standard band, with covenants on interest cover and margins. Compare that with most goodwill purchases, where 50% is the ceiling, and the appeal is obvious: the income is contracted, monthly and measurable.
Financing a rent roll purchase
The structure follows the asset: senior debt against the book at 50 to 80% depending on lender and quality, the balance from equity or property backing at roughly 6% to 9% p.a. as a working rule, and the retention holdback protecting the price. A real estate licence and property management experience are entry requirements with most lenders. Start at business acquisition finance.
Frequently asked questions
How much is a rent roll worth?
Between $2.00 and $3.60 per dollar of annual management income nationally, with Sydney and Melbourne books reaching $4.00 plus and bank valuers benchmarking good books at $2.60 to $2.80.
What moves a rent roll's multiplier?
Landlord concentration, arrears, average rent and fees per property, geographic spread, growth trend, management agreement quality and staff dependence. Retention metrics drive current pricing more than ever.
How does the retention clause work?
Around 80% of the price is paid at settlement, with the balance held for four to six months and adjusted for landlords who leave. It is the market's built-in warranty on the book.
How much can I borrow against a rent roll?
Standard bank appetite runs 50 to 65% of the book's value, with one major publishing up to 80% for suitable books of 100-plus managements, on terms to ten years.
The book, the multiplier, the gearing
Tell us the book size and income and we will come back with the gearing and structure, usually within a day.
This article is general information only and not financial, credit, or tax advice. Ventas Asset Lending is a finance broker, not a lender. Approvals are subject to lender assessment. Consider your own circumstances and speak to a qualified professional, including your accountant for any tax questions.