Selling a Property Management Business

Most property management companies sell on a multiple of cash flow. Smaller, owner-run shops are often priced off SDE, while larger teams are priced off EBITDA. Value usually moves with door retention risk (notice periods and churn), trust accounting quality, owner concentration by doors, and whether maintenance and leasing performance is measurable. For a starting estimate using real transaction data, try Rejigg’s free valuation calculator, then sanity-check it against your portfolio mix and churn history.

You don’t have to use a broker. A broker can help with packaging, buyer outreach, and running the process, and fees are often in the 5–10% range. Some owners prefer to control confidentiality themselves because owner lists and contracts are sensitive. Rejigg covers many of the mechanics: vetted buyers, digital NDAs before sharing details, a data room, and offer tracking. If you want the step-by-step first, start with the Owner’s Guide.

Often yes, especially for third-party management businesses with stable fee income, clean books, and a believable transition plan. Lenders usually want normalized earnings, proof of retention (door and owner churn), and confidence your trust accounting and licensing setup won’t disrupt operations after close. They will also scrutinize owner pay and add-backs. You can test deal sizes and payments with Rejigg’s SBA loan calculator to see what cash flow coverage typically works.

Many deals take a few months from “ready to market” to close, but timelines vary by how fast you can answer diligence. Property management buyers usually dig in on contracts, trust accounting, and your transition plan for owners and tenants. Deals slow down when door history, cancellation reasons, reconciliations, and bank or trust account documentation are hard to produce. Rejigg speeds this up with a structured data room and a single place to handle buyer Q&A and timelines. See the steps in due diligence and closing.

Confidentiality matters in property management because owners can start shopping the moment they sense change. Most sellers use staged disclosure: market quietly, share sensitive details only after an NDA, and wait to communicate broadly until the deal is signed and your Day 1 plan is ready. It also helps to limit access to owner lists, contracts, and financial exports until the buyer is vetted. Rejigg supports this by requiring digital NDAs and allowing only approved buyers into your listing and data room. You control what they see and when.

Common structures include all-cash, cash plus seller financing, and cash plus an earnout tied to retention over 6–18 months. Earnouts show up a lot because termination risk is real, especially with 30-day notice agreements. The details matter: define retention clearly (doors, owners, or management fee revenue) and decide how you’ll treat doors lost to property sales or owner move-ins. Rejigg’s deal dashboard lets you compare structures side by side so you can weigh cash at close against retention risk. More detail is in negotiate a deal.

It depends on your portfolio and how your fees are structured. Doors are simple but can distort value if one owner has many low-fee units or heavy maintenance volume. Revenue-based earnouts are common, but you need a tight definition of what counts, such as management fees only or management plus leasing and admin. Profit-based earnouts can get messy because staffing and accounting choices after close change margins. Many clean setups use management fee revenue with a baseline and a carve-out for documented property sales. Rejigg’s offer tools help you compare earnout definitions before you sign.

Working capital in property management can be confusing because “cash in the bank” may be mostly owner trust funds. Buyers usually want enough operating cash to cover payroll and normal bills, while keeping trust accounts fully reconciled and owner balances intact. It’s worth separating operating accounts from trust accounts early so the negotiation doesn’t turn into a debate over bank balances. Your purchase agreement should spell out which accounts transfer and how timing float is handled. Rejigg helps by organizing bank and trust documentation so this doesn’t become a last-week surprise.

Most buyers ask for a door list or rent roll by owner and geography, your management agreement template, and a summary of termination and assignment terms. They also want a cancellation log with reasons, trust accounting reconciliations, and your bank and trust account structure with signer info. Many buyers will ask for basic maintenance and leasing metrics, plus an org chart, software stack, and vendor list. Rejigg’s data room is built for this workflow. Upload once, control access by buyer, and stop re-sending attachments. Start with prepare to sell.

Buyers usually triangulate multiple sources. They compare the door list in your PM system to owner statements and management fee billing, then tie that back to trust bank activity without counting pass-through deposits as revenue. They also review door movement over time: adds, losses, and the reason for each offboard. If the sources don’t tie out, buyers assume either weak controls or undisclosed churn. Rejigg helps by keeping exports, statements, and supporting schedules in one data room so buyers can confirm quickly under NDA.

Tax outcomes depend on your entity type, whether the deal is an asset sale or an equity sale, and how the price is allocated across goodwill, equipment, and any non-compete. Many property management firms have limited hard assets, so goodwill can be a large portion, which often affects capital gains treatment. Since allocations are negotiated in the LOI and purchase agreement, it’s worth involving your CPA early. That way, you can compare offers on after-tax proceeds, not just headline price. Rejigg’s deal tracking keeps terms and proposed allocations organized across offers for easier review.

Yes, non-competes and non-solicits are common because buyer value is tied to owner relationships and team continuity. Terms vary by state and deal size, but most buyers push for a scope that covers your service area and property management and leasing services for a few years. Overly broad restrictions can create enforceability problems, so it’s worth negotiating reasonable geography and a clear definition of restricted activities. Use negotiate a deal to evaluate terms and keep redlines organized.

Usually yes, but it takes planning. Many states require a licensed broker to supervise property management activity, and buyers need a clear Day 1 compliance plan. Depending on the state, that could mean the buyer already has a broker-of-record lined up, a transition period, or a licensing change for the acquiring entity. This can also affect lender comfort. Prepare a simple licensing map showing jurisdictions served, required licenses, who holds them today, and the post-close plan. Rejigg’s data room is a good place to store license copies, org charts, and the transition checklist for quick review.

Often yes. Many sellers separate third-party management contracts and fee income from owned real estate and its rental income. The key is clean separation in your financials and staffing, plus clarity on shared maintenance capacity so the buyer understands what they are actually buying. You also need a plan for shared systems and staff after close, especially if you currently blend reporting or expenses. Rejigg helps you package the management book as a standalone asset with clean financials and supporting documents so buyers can underwrite it without guessing.

Most buyers care less about the software name and more about setup and continuity. They will ask about permissions, trust accounting workflows, owner statements, tenant portals, and payment rails. Many smooth transitions keep the current system in place for 30–60+ days, then migrate in phases to avoid missed rent payments and statement errors. What helps most is a documented “one month in the system” walkthrough, from rent posting to late fees to owner draws and statements. Rejigg can store your workflow notes, report samples, and migration plan in the data room so buyers can assess risk before signing.

It depends on how relationship-driven your book is and whether you are the qualifying broker. Many transitions run a few weeks to a few months, with the heaviest lift around the first two owner statement cycles and the first real maintenance escalation. Owners usually want reassurance about who to call, how approvals work, and whether payment methods will change. The best transitions have scripted outreach, a clear escalation path, and short-term continuity in portals and payment rails. Rejigg’s transition planning guide lays out a practical 30–60-day approach.

Buyers discount fastest when trust accounting is messy, such as late reconciliations, weak permissions, unexplained adjustments, or unclear bank structure. Concentration risk also hits value, especially when large owner accounts are seller-owned relationships with short notice terms. Churn without reason codes, maintenance charges that owners dispute, and a fragile team structure where one person holds critical knowledge can all lead to retrades. Rejigg helps surface these issues early by keeping diligence organized, requiring NDA-first sharing, and giving buyers a clear view of the facts instead of assumptions.

In property management, you need to compare how much cash you get at close and how much depends on retention. Pay attention to how retention is measured, how long any earnout runs, whether seller financing is required, and what the buyer expects for working capital after separating trust from operating cash. Transition expectations matter, too, especially if you handle key owner relationships or broker-of-record duties. Rejigg’s deal tracking dashboard compares offers by enterprise value, cash at close, contingencies, earnouts, and timeline so you can pick the best risk-adjusted option. See negotiation guidance.

The right buyer depends on your portfolio and where the risk sits. Local operators often do well when owner relationships are personal and the book relies on local vendor and leasing routines. Roll-ups and multi-market platforms may pay more when reporting is clean, trust controls are tight, and the book transfers without heavy seller involvement. It helps to match the buyer to your mix, such as SFR vs small multifamily vs HOA, Section 8 exposure, and geographic spread. Rejigg helps by vetting buyers and supporting discreet outreach. Start at find your dream buyer.