- There are many signs that it’s time to sell your property management business. Some signs relate to the company, while others relate to external opportunities.
- A single sign might not mean you’re ready to sell, but when you notice several signs, it’s probably time to start seriously considering selling.
- You know what’s best for you, your family, and your business. These pointers give you a bit of direction based on why other property management business owners have sold their businesses.
Launching your property management business then was a big decision. Choosing to sell it might be even more significant. After investing years of your life into building a respectable property management company, it can be challenging to let it go.
If you’re struggling to decide whether to continue with your property management company or sell it, the signs listed in this blog might provide some much-needed clarity.
Weigh the Benefits and Drawbacks
It is best to weigh your options before selling your property management company. Here are some signs that can help you determine whether you’re making the right choice.
Sign #1: You’ve Accomplished Your Business Goals and Objectives
You may have had some big dreams for your property management company when you started. How many plans have come to fruition after years of hard work?
If you’ve hit all the milestones you originally planned to achieve, your involvement as a business owner may have come to a natural conclusion. Selling your property management company will allow you to close this completed chapter of your life and move on to other opportunities and ventures you want to pursue.
Sign #2: You’re Ready for a New Challenge or Passion Project
Running a property management company can take enormous time and energy. At some point in your life, your priorities shift and change. You may discover you’re ready to invest your resources in something outside your property management business. Similarly, you might want to develop a new skill.
Launching a new business, starting a non-profit organization, pursuing higher education, or publishing a book may require significant time and energy. So, juggling the responsibilities of your property management company while exploring new pursuits may be counterintuitive.
If you’re feeling called to a new project, it may be better to sell your property management company so you can redirect your focus and free up more of your time.
Sign #3: Risks Outweigh the Benefits
At the onset of your business, you may have been confident to take potential risks in stride because there wasn’t a lot of value on the line. However, there may come a time when external factors may put your business at risk. The economy may suddenly change, or industry trends may affect the profitability of your rental business.
If you discover that you’re no longer capable of mitigating the risks associated with your business, the most practical solution would be to sell it before irreversible damage is done.
Sign #4: You Are Uninterested in Acquiring New Units
Do you still remember the first property you added to your portfolio? Perhaps it was a nerve-wracking yet exciting experience. There’s nothing quite like the thrill of new doors with all the potential and that swell of pride that comes as you grow your business.
But that excitement can wear thin as you get used to acquiring new assets. You may start feeling frustrated about your career when you’re no longer learning new things and upskilling. Consider selling your property business so you can find something new to get excited about.
Sign #5: You Have to Terminate A Business Partnership
If you co-own your property management business, especially with multiple partners, issues within your group could be a legitimate reason for selling the company.
Notwithstanding your best intentions and best efforts, business partnerships often get sour when individuals begin to chart different goals or operational strategies. Not being able to run your business as you see fit is frustrating. It could even offset all the benefits of owning the business.
Selling the property management company could save your relationship with your partner(s). Doing so also prevents any bigger issues from arising that may hinder your business down the line.
Sign #6: You Want to Spend More Time With Family
Are you ready to shift more of your focus from work to family? Many business owners sell their businesses to spend more time with family. For some owners, it’s about being there when the kids get home from school. For others, it’s about being available to help care for aging parents. Or maybe you have grandkids now and would like to help provide childcare for them during the day.
How much more time would you be able to spend with your family if you were to sell your property management business?
Sign #7: You Need (or Want) to Free Up Capital
Do you know how much your property management company is worth? Selling your business could give you access to capital that could be used to fund other ventures. You could use the proceeds to:
- Launch your new business or non-profit organization
- Finance your new passion project
- Fund a new investment
- Pay off debts
- Cover your living expenses in retirement
- Invest in cryptocurrency
There are so many possible ways you can benefit from accessing the capital currently locked up in your property management business.
Sign #8: It’s Time to Retire
You’ve spent your life working and building your rental portfolio. Maybe you’ve reached a point where your career has run its course, and you’re ready to step away from the workforce.
Selling your property management company may give you enough resources to retire and re-evaluate how you’d like to spend your time and energy.
Sign #9: You Can’t (Or Won’t) Compete with High-tech Property Managers
Technology is what sets property management companies apart from one another. Features like online marketing, virtual tours, 24/7 maintenance support, and automated rent collection have become essential in the light of the COVID-19 pandemic. Rental portfolio owners expect high-tech services that will allow them to stay competitive in the market.
Some property management business owners opt to sell their company rather than play catch-up with agile and tech-savvy property management companies emerging in markets all over the country.
Learn more about the ins and outs of the emerging PropTech scene, with Poplar’s Chief Technology Officer Rico Mok and Chief Strategy Officer Scott Breon in this recorded webinar.
Sign #10: Your Profitability is Declining
Rent control and renter rights have been hot topics for decades, mainly as housing expenses have grown at a far greater pace than incomes. While affordable housing is critically important, it can also cause property management business owners to sell their companies due to declining profitability.
In California, for example, AB 1482 was enacted in 2019 to limit rent increases to 5% plus inflation statewide. And in response to the COVID-19 pandemic, the federal government placed a temporary nationwide moratorium on evictions. While these measures were helpful for renters, they adversely affected business owners using rental income to cover their living expenses.
Declining profitability may signify that it’s time to sell their property management company.
Only you can decide what’s best for you and your business. If you only see one of these ten signs, you might continue to own your property management business happily for several more years. But if you’re experiencing several of these signs, it might be time to take the next step and sell your property management business.