Sell a Business for the Best Price
Selling a Property Management Business
With the economy limping along, many property management business owners are hesitant to put their businesses on the market. At Gaebler, we think it's a great time to sell a property management business. Here's why . . ..
The business-for-sale market is just as frustrating for buyers as it is for sellers these days. Although there are plenty of entrepreneurs who want to buy a property management business, capital restrictions are holding them back.
The business-for-sale market is extremely dynamic. Knowledgeable entrepreneurs understand that market timing isn't nearly as important as other factors in a property management business sale. The key is to go into the sale with your eyes open and with complete awareness of market condition.
Advantages of Hiring a Broker
A good broker can offer several benefits to business sellers. Right out of the gate, brokers know how to help their clients properly prepare their businesses for a sale. More importantly, brokers have the ability to identify serious buyers and maintain confidentiality throughout the sale process. Brokerage isn't cheap. But even though you can spend as much as 10% of the sale price on a good broker, you'll likely achieve decent ROI through an improved final sale price.
Professional appraisers can use three methods to determine the value ofa property management business: The income method, the asset method and the market method. While the income method uses anticipated revenues as a value basis, the asset method focuses on the company's capital, real estate and intellectual assets. In many sales, the most accurate valuation comes from the market method which determines value based on the recent sales of similar businesses. As a safeguard, consider conducting appraisals using variations of multiple appraisal methods. Sellers should take note of the fact that all three valuation methods reward businesses that takes steps to increase assets and income.
It's rarely possible to sell a property management business in a month or two. Although asking price and other factors contribute to sale time, it's difficult to predict how long your business will be on the market before you locate the right buyer. Before you can list your property management business, you'll need to invest as much as a year in preparing it for prospective buyers. Once your business is ready for the marketplace, it could take an additional six months to a year to locate the right buyer.
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