Valuation Method 1 - Multiple of Revenue

One method for valuing a vacation rental management company is the Multiple of Revenue Method. The typical value of your company is often about a 1 x multiple of your trailing twelve months (TTM) "gross margin". The "gross margin" is your commissionable revenue plus all of your ancillary fees (housekeeping, guest fees, etc...).

Total Commissions* Extra Fees Multiple Valuation Method 2 - Multiple of EBITDA

Another popular method for valuing a vacation rental management company is the Multiple of EBITDA Method. Most vacation rental companies fall in the 2-5 X multiple of your trailing twelve months adjusted EBITDA. An important consideration to take into account are “add-backs”. Add-backs are expenses on the books that would have gone towards profit. Examples of add-backs are personal vehicles that the company pays for, “work trips”, meals and entertainment, etc… These add-backs can get quite subjective and often negotiated.

EBITDA Add-Backs Multiple Valuation Method 3 - Valuation per Property

A third method of valuation is simply a function of the value per management contract or a "price per door".

# of Properties Value per "Door"