How to maximise the value of your property management business before you sell
- May 29
- 5 min read
If you're running a short-term rental property management business and an exit is somewhere in your thinking – whether that's in one year or five – the decisions you make today will determine how much your business is worth when that moment comes.
Simon Tolson has been through this process twice. He built and scaled Above Beach Cottages in Cornwall to 180 properties before exiting in 2017. He then acquired Rumsey of Soundbanks, grew its commission income from £180,000 to £1.2 million, and sold again in 2023. He now consults with property management operators on direct booking strategy and preparing businesses for sale.
In this episode of Host Planet Bitesize, Simon shared five practical tips – and a bonus insight – that most STR operators won't hear anywhere else. Catch the full episode on YouTube, Spotify, or Apple.
Tip 1: Start an owner newsletter (even if most owners don't read it)
The first tip sounds counterintuitive, but it's one of the most strategically valuable habits a property management business can build: a regular owner newsletter.
The point isn't communication for its own sake. The newsletter serves two purposes that matter enormously when it comes to a sale.
First, it gives you a channel to introduce changes gradually. If you want to add a service charge, introduce a damage waiver, or change how fees are structured, you can mention it in the newsletter months before it takes effect. By the time the change lands, owners have technically been informed – and if anyone pushes back, you have written evidence that you communicated it.
Second, it smooths the transition during a sale. When ownership changes, owners who've been receiving regular communication are already primed to expect news. You can use the newsletter to warm them up to the idea of new management, introduce the incoming team, and manage the handover without shock or dispute.
The key insight: it doesn't matter if most owners don't read it carefully. What matters is that it was sent, it was consistent, and everything is in writing.
Tip 2: Increase the value of your direct bookings – before you sell your property management business
Direct bookings are worth more to your business than platform bookings in almost every measurable way: lower fees, higher margins, more control. But their value to a potential buyer is also significantly higher – and that gap is something you can exploit if you act early enough.
Simon recommends building direct booking revenue before you approach a sale through a combination of:
Service fees added to direct reservations.
Damage waivers that create additional revenue per booking.
Your own booking platform or OTA – something increasingly common among mid-sized operators – which allows you to charge an additional 5–10% on direct bookings while still positioning it as a saving for the owner (versus the 15–18% they'd pay through Airbnb).
The virtuous circle Simon describes: more direct bookings generate more revenue, which can be reinvested into paid search or directory listings, which generates more direct bookings.
The bonus tip: make an accounting change to recognise revenue from direct bookings on the day of booking rather than the day the guest arrives. For direct bookings with a non-refundable deposit, this moves a significant amount of revenue forward from one tax year to the next – creating a measurable bump in your business's numbers that makes it look considerably more attractive to a buyer. In both of Simon's exits, this change was worth a meaningful amount of money.
Tip 3: Consider a private approach to the right buyer
The conventional wisdom for selling a property management business is to go to market – list it, attract multiple buyers, and let competition drive the price up.
Simon's third tip challenges that assumption.
For the right buyer – particularly a privately owned, mid-sized operator rather than a venture-funded consolidator – a private approach offering exclusivity can give the seller considerably more control over the process. You're not just negotiating price; you're negotiating the terms of due diligence, the timeline, and the structure of the deal itself.
The two main deal structures are a share sale and an asset sale. A share sale is generally more tax-advantageous for the seller but comes with more intrusive due diligence, because the buyer is taking on any liabilities within the company. An asset sale involves less scrutiny but is less tax-efficient. The two positions aren't mutually exclusive – in Simon's final sale, the parties agreed on an asset purchase price that sat between what a share sale and an asset sale would have each been worth, and both sides were satisfied.
Knowing the difference – and being prepared to negotiate on structure as well as price – is a significant advantage.
Tip 4: Air your dirty laundry on day one
This is the tip most sellers don't follow – and the one Simon argues is most valuable when they do.
Before due diligence begins, before an offer is even on the table, disclose everything that might be a problem. Long-standing owners without formal contracts. A key member of staff who's leaving. Family members on the payroll. A lease that's running out. Anything that a buyer's due diligence team will eventually find.
The reason is counterintuitive: when you disclose a problem before due diligence, it's no longer a discovery – it's a known variable that the buyer has already priced in. When due diligence uncovers it instead, it becomes leverage. The buyer can use it to renegotiate price, delay completion, or create doubt about what else might be hidden.
By disclosing proactively, you neutralise that leverage entirely. You set the frame. And in Simon's experience, what looks like a weakness disclosed upfront often becomes a quiet psychological advantage: if the picture you painted in advance was accurate or even slightly pessimistic, and the reality turns out to be better, that builds trust rather than eroding it.
The practical approach: before any offer is made, sit down with the prospective buyer and walk through every potential concern you can think of – even the minor ones. The things you give on early cost you very little. The things they discover later can cost you significantly.
Tip 5: Negotiate to keep existing booking fees and commission
The final tip is the one most sellers overlook – and according to Simon, it can add 20% or more to the total amount received, without ever appearing in the headline purchase price.
When you agree a sale price and set a completion date, the forward booking pipeline represents real, recognisable revenue – particularly if you've made the accounting change described in Tip 2. That commission on existing bookings belongs to whoever completes the sale, unless you negotiate otherwise.
Simon's advice: as negotiations progress, quietly establish that fees and commission on all existing bookings stay with you. It's a relatively easy concession for the buyer to make, particularly if completion is timed towards the end of the year when the forward booking pipeline looks smaller. But sales have a habit of dragging on – and the longer they take, the more bookings accumulate in the pipeline.
In Simon's most recent sale, what started as a modest looking sum of forward commission grew substantially as the completion date slipped from late in the year to April, by which point summer bookings were filling up rapidly. The additional amount didn't appear in the headline price – but it added approximately 20% to the total consideration he received.
If you don't negotiate this point, the buyer will change the accounting practice the day after completion and bank that revenue themselves.
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