A property management company is worth its recurring management fees, but only the fees that survive the change of owner, so the three checks that matter are owner-client retention, the trust accounts holding tenants' and owners' money, and the license the company operates under. Many states require a real estate broker license to manage property for others, and rules vary by state. As of October 2026, an SBA-financed purchase cannot use an earnout to share retention risk with the seller, so you have to price or structure for attrition up front.
Revenue usually comes from several fee types. Sort them before you value anything:
Ask for a schedule of every owner client, the doors each one has under management, the fees each one paid by month for 24 months, and the start date of each relationship. That schedule shows recurring revenue, churn and concentration at once.
We do not quote a sale multiple for property management companies. We have no reliable published figure. Price the business on verified, recurring SDE and on the attrition you expect, then test the price against what a lender will finance.
A property manager holds other people's money: rents collected for owners and tenants' security deposits. States generally require these funds to sit in trust accounts, separate from the company's own money, and to be reconciled regularly. The rules vary by state.
The trust accounts are where a buyer can inherit a problem that does not show in the profit and loss statement. Before closing:
In a stock purchase, the company's past trust account problems stay with the company you now own. In an asset purchase, you still take over the duty to hold and return deposits. Either way, the reconciliation must be clean.
In many states, managing rental property for others requires a real estate broker license, and the company must operate under a designated or supervising broker. A few states have separate property management licenses. Rules vary by state, so check the specific state's real estate commission before you sign a letter of intent.
Office leases matter less than in retail, since owners rarely visit. Confirm the lease can be assigned or ended without a large penalty.
SBA rules prohibit seller earnouts, so you cannot make part of the price depend on owners staying. Your tools are a lower price, a seller note, and the seller's help with the handover. The seller may stay on as a consultant or employee for up to 24 months after closing under SOP 50 10 8.1.
Illustrative numbers, not industry data:
Run your coverage test on the revenue that remains, not on the seller's numbers. Under SBA rules, a first acquisition must show 1.25x debt service coverage on historical cash flow, but your own downside case is what protects you.
Where these numbers come from: The earnout prohibition, the 24-month seller consulting limit and the 1.25x coverage test are SBA SOP 50 10 8.1 rules, summarized by Beancount and Cantrell Law Firm. The worked example uses illustrative numbers. We do not cite a property management multiple because there is none in our sourced data. SOP 50 10 8.1 applies to loans that receive an SBA loan number on or after October 1, 2026 (SBA Information Notice 5000-880695).
Not always to own it, but the company usually needs a licensed broker to operate in states that require one. Check your state's rules on who can own the company and who must supervise it. Confirm with a real estate lawyer in that state.
It has traits roll-up buyers look for: recurring fees, local fragmentation, and shared software, accounting and maintenance. It also adds trust account and licensing work to every acquisition. See which industries work for roll-ups.
Residential portfolios usually have many owners and many small accounts. Commercial portfolios are often fewer, larger relationships with more concentration. Pick the one whose risks you can underwrite and manage.
Recurring fees and fragmented local markets make property management a candidate for a roll-up. Read which industries work for small business roll-ups to compare it with other sectors before you commit.
Meraki Dealmakers is a service of Meraki Partners, LLC, an advisory firm. It is not a broker-dealer, investment adviser, business broker, law firm or accounting firm. This article is general information, not legal, tax or investment advice.
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Meraki Dealmakers is a service of Meraki Partners, LLC.
Meraki Partners, LLC is an advisory firm. It is not a broker-dealer, investment adviser, business broker, law firm or accounting firm, and does not solicit investors or receive compensation based on capital raised.
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