Thinking of Selling your Management Rights?
By Paul Gaffney
If you’re thinking of selling your Management Rights there are some steps you need to take to ensure you maximise your sale price and have a smooth sale process.
Most permanent complexes have experienced very little downturn in their businesses during the Covid periods and therefore the preparation of Sales Figures has not changed a great deal.
It is important to engage an industry specialist accountant to prepare your Sales figures because if the figures are incorrect then any prospective purchaser may not proceed.
We are seeing a trend for loss of units in the rental pools due to owner occupiers buying up investor units, so if there are lost units the Sales figures need to be adjusted for them.
Holiday and Short Term complexes:
There has not been a great deal of sales of the holiday and short term complexes since Covid.
Valuers are asking accountants to prepare three years of figures for 2019, 2020 and 2021 and adjusting the Covid months of April, May and June 2020 to reflect the trading for April, May and June 2019. The Valuers have termed this adjustment of the figures as normalisation.
While we have prepared a number of these figures we have not seen any Sales proceeding. We think that banks are still very cautious in funding purchasers unless the purchaser has extra security and the business is still trading well.
Some of these businesses have actually experienced an upturn in business activity since Covid. At this stage we have not seen any requests for normalisation of these figures back to 2019 trading but feel any purchasers will be requesting adjustments to the figures before proceeding with any purchase of the businesses.
The recent lock downs have had a drastic effect on most of the short term and holiday businesses with high levels of cancellations so the future is very uncertain and again how Valuers and Financiers ask accountants to approach the preparation of Sales and Verification figures in the future at this point is unknown.
The Financiers are the largest stakeholders in any purchase transaction, so in the end they will have the final say on what is required.
In most Short Term or Holiday transactions the Financiers are currently looking for experienced operators with strong financial backing.
If you are thinking about selling your Management Rights, we’re here for you. Our experienced team can walk you through your options and help you get the best price. Enter your details below to learn more!
All information provided here is general in nature only, in preparing it we did not take account of your individual and financial situation or particular needs.