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    Key takeaways


    • Mitch Deminski shares his decision-making process in selling S4RE to Poplar Homes.
    • There are several reasons why owners sell their property management businesses, which include advancement to new technology, burnout, and lack of inheritors.  
    • In selling your property management company, several factors are at play in determining the value of your business, like a strong and reputable brand, location, portfolio, established relationships, financial performance, and technology and processes.


    As the real estate market continues to evolve and adapt to changing dynamics, property management businesses find themselves navigating a landscape of endless possibilities. However, there will come a time when owners have to call it quits and sell their companies. In this Propcast episode, Justin Lieberknecht is joined by Mitch Deminski, owner of S4RE, to explore the thought-provoking decision of selling his property management company and the reasons behind it.



    Reasons why owners sell their property management companies


    In this section, let’s examine the key factors that lead entrepreneurs to consider this strategic move of letting go of their business. There are certain benefits and opportunities that await those who choose to take this daring step. Let’s hear what Mitch had in mind when he decided to sell S4RE to Poplar Homes.


    Advancement to new technology

    For some, the prospect of selling their well-established property management enterprise can be a gateway to unparalleled growth, personal success, and newfound ventures. One of these reasons for Mitch is to level up their resources by joining a bigger company with better technology.

    “In ‘16 [and] ‘17, my wife and I really wanted to refocus on what we were doing. And at that time, we found that this business is worth something, which kind of surprised me,” Mitch started. “But, I also learned how far behind we were. I felt like we were always a leader in Columbus, but what was going on nationally with all the new technology that was going on, I felt like we were behind.”

    So, from 2016 to 2018, Mitch and his company tried to revamp a lot of things and start growing again. Yet, without all the essential tools and technology, these efforts could only max to a certain level for his company.

    Despite these hindrances, Mitch wasn’t ready to just give up and sell his company. What he was looking for was someone that could help him level up his business, which he found in Poplar Homes.

    “We weren’t necessarily looking to sell the company because I got a lot more to give. However, I needed help. We’ve tried technology and paid thousands of dollars to something that just didn’t work for what we’re doing,” he explained. “So, [with Poplar], I feel a little bit support and now, I can cry to somebody else if something doesn’t work.”


    Fresh start

    Property management is a demanding industry that requires constant attention to detail, round-the-clock availability, and the ability to handle various challenges. Over time, the relentless pressure and workload can take a toll on even the most dedicated entrepreneurs, leading to burnout.

    When a property management company owner reaches a state of burnout, it can significantly impact both personal well-being and business performance. This ultimately leads to just wanting to sell and start anew. Plus, money made from the sale can pave the way for a brand new interest or investment, or simply prioritizing well-being and taking some time off.

    Selling your property management company is also beneficial for the business to thrive under new leadership. This way, those doors under your company will be retained and will spare your homeowners the stress of looking for a new property manager.


    Lack of inheritors or people to take over

    For some entrepreneurs, selling their property management companies doesn’t necessarily mean they’re giving up or fed up. Sometimes, it’s about wanting to rest from the heavy load of duties and not having someone who they can entrust their business to.

    “I think the most common one is [companies] stay in the family,” said Justin. “I think the second most common one is somebody in the company takes it,” he added. But the most unfortunate path is for some owners to just close the business, leading doors to scatter across different property managers.

    For Mitch, it’s about looking for the rightful inheritor who shares the same passion as him. “This is my legacy. This is my reputation. And I’m not gonna give it to just anybody,” he said. “Do they have the vision to take it to the next level? Do they want it? Do they have the passion? It really does come down to passion because you can’t do this business [and] you’d be miserable if you don’t have any passion about delivering a great product to somebody.”


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    Factors giving value to property management companies


    Some property managers often agree to discuss their businesses with potential buyers just so they can determine the market value of their companies. They don’t want to sell right away; they just want to see where they stand in the competitive world of property management.

    So, in this section, let’s dive into some of the factors that add value to property management companies.


    Strong and reputable brand

    Brand reputation can significantly contribute to a company’s value. A well-established brand is more likely to attract new clients, retain existing ones, and command higher fees for services rendered. A positive reputation built on trust and reliability can also increase the company’s appeal to potential buyers.



    The geographical location of a property management company can also significantly impact its value. Companies operating in high-demand real estate markets or areas with strong growth potential are often more attractive to buyers. A strategic location can mean easier access to a broader client base and greater opportunities for expansion.



    Another factor that adds value to a property management company is portfolio size and quality. A diverse and extensive portfolio of managed properties, encompassing residential, commercial, and industrial real estate, showcases the company’s ability to handle various property types, providing a sense of stability and expertise to potential buyers.


    Established relationships

    Existing bonds with property owners, real estate agents, contractors, and other industry stakeholders are valuable assets. A property management company with strong connections can gain access to new clients and resources, making it more appealing to buyers looking for a well-connected and integrated business.


    Financial performance

    The financial health and performance of the property management company are other essential factors in determining its value. Prospective buyers will analyze financial statements, revenue streams, profitability, and cash flow to assess the company’s stability and potential return on investment.


    Technology and processes

    Property management companies that have invested in efficient technology, management systems, and streamlined processes are likely to be valued higher. Automation and modern software can enhance operational efficiency, reduce costs, and improve the overall client experience.


    Employee expertise

    Knowledgeable employees can ensure the smooth operation of the business and maintain strong relationships with clients, thus significantly contributing to a company’s value.

    Overall, evaluating these aspects comprehensively will help you determine a fair and accurate value when selling your property management company.


    Up next: Cost of owning a rental property: What homeowners need to know



    Parting thoughts


    Whether you are selling your property management company to join a bigger venture or prioritize your well-being, embrace the decision as an opportunity for personal growth and a chance to rest from the heavy loads of tasks business owners have.

    Whichever path you choose to pursue, may this new chapter bring you fulfillment, balance, and continued success. And as you pass the baton to new ownership, remember that your legacy lives on in the foundations you’ve laid, the reputation you’ve built, and the positive impact you’ve made on your clients and community.




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