In order to better inform you, the seller, on this process, we will be posting a three-part series of considerations before, during, and after the sale of your business.
One thing all former vacation rental company owners agree on is that they wish they had known more about the sales process before selling their business. Whether it’s the timing of the sale, legal costs, or tax considerations, here’s how you can be more informed when you’re thinking about selling your vacation rental company.
1. Research Your Buyer
The first consideration is simple: Just as we conduct research on companies before partnering with them, we suggest your first step is to do your own due diligence.
Google – Start by simply Googling the name of the company interested in partnering with you and taking note of the first few search results. Is your possible business partner in the spotlight for industry advancements and growth, or is it for indiscretions?
Company website – Also take a close look at the company’s website. Pay specific attention to their updates and press releases. Has the company recently grown, been absorbed, or entered new markets? Are they currently present in your market? Make note of the types of homes they manage and whether or not they are similar to yours.
2. Stay in Touch
The second consideration is all about thinking ahead, getting organized, and planning the next steps. Staying in contact early on can assist in a smooth transition while preventing future headaches caused by misalignment in values or company goals.
Be in constant communication with the business to determine what will be needed on your end should you choose to sell, and do your best to proactively gather documentation.
This partnership should be thought of as a team, each doing their part and putting in the work required to accomplish mutual goals. So, when considering future partners, make sure it’s a company you can imagine yourself working with, and don’t force what’s not there.
3. Timing Is Key
A third consideration when selling your business is the timeline of the sale. The timeline to many sellers becomes a pain point because they either feel rushed, or that the sale is taking far longer than they had imagined.
“The biggest concern business owners have about the process of the sale is the timeline. Since there are a lot of little details that go into the process, it’s important to have everything organized,” says Vacasa Corporate Development Manager Joel Parker.
As a starting point, Joel suggests making sure all homeowner agreements are accounted for and fully executed with signatures, and having a list of assets that go with the sale.
Timeline of a Sale
While every sale is different in the vacation rental world, through our experience, here is a general timeline for most sales:
- 15–30 vacation properties – For companies with 15 to 30 properties, there is a 4 to 5 week minimum for valuing the portfolio and negotiating terms. Then, once the deal has been finalized, there is a 4 to 5 week integration process to transfer the business to the prospective buyer.
- 30–200 vacation properties – For companies with portfolios of 30 to 200 properties, there is a 4 to 6 week minimum for valuing the portfolio and negotiating terms. Once these terms are settled, 4 to 8 weeks are needed for integration to the new buyer. The timeline is dependent on the number of employees to integrate to the new company and number of homes in the portfolio.
- 200+ vacation properties – For companies with more than 200 properties, the timeline for the creation of the deal extends to a minimum of 8 to 12 weeks. The integration period is difficult to predict for companies this large, and the timeline is defined through a collaborative discussion between the buyer and seller.
The timeline for these sales depends on a few factors:
- Hirable staff from your company
- Booking software your company currently uses
- How ready you and your company are to sell
If you’re ready to start preparing for a potential sale, here are some things to consider before selling your vacation rental management company that will help the process move quickly and smoothly. The more work you put into organization upfront, the faster the money from the sale will be in your pocket.
Vacasa’s Corporate Development team has helped more than 60 business owners navigate the sales process in national and international vacation rental markets. With these partnerships, our team has gained invaluable experience and knowledge that we want to share with you. If you have any questions about how to prepare to sell—or would like a free, confidential valuation of your company’s value—we’d love to hear from you! Please call us at 844-333-3789 or email email@example.com.
Contributed by Leslie Irwin.