FUNDAMENTALS
PROPERTY MANAGEMENT
How to Buy or Sell a Property Management Company ARE YOU READY FOR THE FAST TRACK TO GROWTH?
by Richard Hart
uying a property management company is the fastest way to grow your business. But how do you know what a good purchase price is? There are a few ways to determine how prices are set. Take the prop- erty management monthly contract and do a monthly multiplier on that. If a company has 100 properties at B
$100 per month, then that is $10,000 a month in management contracts. Then, multiply from eight to sixteen, depending on the seller, the buyer, and the area you are in. All these things become factors. You also must consider any other revenue they may have. But that multiplier is a starting point.
You can also do yearly revenue, which is a smaller multiplier. Most people only want to buy the contracts of the business and not the entity itself. So, you really need to evaluate exactly what you want to buy. Buy- ing contracts and just folding those contracts into your existing proper- ty management company is much
52 | think realty magazine :: december 2021
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