This is the final post in a three-part series of articles about things to consider when selling your vacation rental business. Part one covers what to consider before selling. Part two covers preparing the deal.
While it’s difficult to envision the endpoint when you’re in the middle of crucial negotiations, planning your future is an important part of any sales deal. Once you’ve signed the APA, changes start happening quickly. Here are a few to keep in mind:
The first 30 days after the sale of your business will be a transition period for homeowners and employees. They may still reach out to you with questions and concerns. It can be difficult to separate yourself from relationships you’ve had for so long, but it is crucial at this time to redirect questions to the new management team. This will help them establish the proper rapport.
Make sure that your buyer is willing to help during this transition process. A transition team can be a true lifesaver. For example, Vacasa provides a team to be the “boots on the ground” during the transition. Even after the team leaves, there is still a support team ready to answer any questions that may arise.
Not only will there be an operational transition with the sale of your company, but a financial transition for you personally. The sale of your business could result in the financial security you need for retirement, or the cash advance you need for your next business venture. We recommend having legal representation throughout the process to ensure the terms of the sale meet your needs.
In addition, hiring a CPA can help pave the way for a secure financial future. They will oversee the difficult task of managing your taxes after selling, including:
- The profit that the IRS will want to tax, determined by the difference between your tax basis and your proceeds from the sale.
- The amount of taxes you will have to pay depending on whether the sale is taxed as ordinary or capital gains (most often, business sales are considered capital gains).
- The kinds of assets you have. For example, tangible assets (items such as furniture, vehicles, and supplies) and intangible assets (like trade names, homeowner contracts, and goodwill) add to the value of your sale and will be determined either capital or regular gains.
Pro-tip: We highly recommend that you leave assets that the buyer doesn’t want out of the deal, as you could be taxed for them. It’s better to simply donate office inventory or claim it as a loss for a deduction.
Aside from your financial future, your professional future will be changing in this new journey. Unlike other vacation rental management companies, Vacasa recognizes the value of each owner’s management and industry knowledge. This is the point in your career where you can focus on what you truly love, whether that be local operations, housekeeping, or sales.
Other owners have also utilized this time to focus on what they love outside of the vacation rental industry. This may be the perfect time in your life to begin checking things off your bucket list.
Vacasa 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.