Preparing your figures before selling your business
When you’re looking to sell your lettings portfolio, there’s a certain level of information you need to be prepared to disclose so a buyer can be clear on what they’re buying and offer you a fair price.
You’ll need to be more clued up on your figures than if you were to enter Dragons Den!
When we’re contacted by letting agents who are looking to sell, one of the first things we ask them to complete after our initial informal chat is our seller’s fact find. This fact find contains crucial information for us to evaluate if the deal is for us and what we’d be prepared to offer.
If you’re considering selling, you may wish to start preparing your figures so you can speed up the process further down the line. This is the sort of information you’ll need to ensure you have access to:
Turnover
What’s the total turnover for lettings in the last 12 months? (it’s likely you’ll need to disclose your turnover for the 2 years previous to this too)
How much of this was collected as recurring monthly management income?
How much of that turnover was from set up / admin fees?
How much of that turnover was from one-off let-only fees?
How much of that turnover falls into other categories such as works recharges / commission etc?
Managed property portfolio
How many properties do you currently have let with full management?
What’s your average monthly rent for your managed properties approx?
What’s the highest monthly rent you currently charge on one property?
Stock type
Are any of your managed properties HMO? And if so, how many?
Are any of your properties let to students? If so, how many?
What percentage of your tenants are claiming housing benefits?
How many let-onlys have you done in the last 12 months where you have taken a commission for finding the tenant without retaining full management?
Landlords
How many active landlords do you have on full management?
How many of those landlords have you onboarded in the past 12 months?
How many landlords have you lost in the last 12 months?
Details on landlord portfolio sizes. For example: do 50% of your landlords have 1 property managed, 30% have 2-5 properties and 20% have 6+ managed?
Team
How many staff would you be looking to transfer over? (if any)
How many of those staff members have been with you longer than 2 years?
What are the salaries of those staff members?
Please note if we were to go further down the negotiations route then we would send you a spreadsheet with further information on staff members you would be looking to transfer which discloses more about pensions / bonuses / disciplinaries / holiday days etc.
We’re thorough with getting the key information we need to make an informed decision on whether or not we’d be a good fit as a buyer for you. But as we say, before we get into the nitty gritty we’d want to meet you first for a completely confidential chat.
Get in touch with spencer@synergyforward.co.uk if you’d like to get started.