Surprise surprise, running a real estate agency is hard work! Facing the challenge of this kind of business year after year can start to feel like all too much.
Many agency owners who are approaching retirement age find themselves faced with a dilemma. They want to take a step back from the stress of being in charge but also don’t feel completely ready to give up working.
When you’re in this situation, it can be easy to feel much of your identity is tied to your business. Real estate is such an all or nothing industry, it is hard to imagine what you would do with your time if you gave up work for good.
Then there is the question of assets - the agency may be your nest egg, particularly if you haven’t been contributing to superannuation for the bulk of your career. It can be hard to decide when the value of your business has reached a point where it will benefit you to walk away.
Moving on without moving out
If you’re looking for cash, security and to keep your hand in, one option can be to cash in on your rent roll and agency but still stay working in the business.
This gives you the freedom to pick and choose the tasks you enjoy most. It also gives the new owner the benefit of a legacy staff member who knows the ins and outs of the business.
Before you look to sell your rent roll and business, you need to make sure your rent roll is in the best shape it can be. Preparing to sell takes time. It means examining which clients can be let go, and reviewing your systems and processes.
While cashing out once and for all may seem like an easy solution, what many don’t realise is the ROI on a rent roll averages 26%. For this reason, it can make more sense to hold onto your rent roll.
Instead of going ahead with a complete sale, there are a couple of other options:
Phase out slowly
An agreement with a new agency or rent roll owner can involve cashing out in percentages over a number of years. This allows you to continue to profit but to gradually lessen your share until you are ready to step back completely.
Involve a qualified broker and get legal advice to make sure your agreement is watertight and mutually beneficial.
Sell 50% now and 50% later
Give yourself a time period of three or five years and agree to stay 50% involved in the business during that time.
You can discuss your role with the new partner / future owner. It may suit you to stick with sales or you may choose a more desk-based position in the business.
No matter what your decision, there is no need to rush. Take a look at the options available to you and get personal advice before making the break.
BDH Solutions have been buying and selling rent rolls for over 30 years. Keep up with our latest listings here.