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Owning a nursery can be an enjoyable and profitable position, but you might be thinking about trying to sell the property in which it’s based. If that’s the case, this guide will walk you through the various steps that are involved in trying to sell a leasehold or freehold nursery, along with tips on how to increase your odds of receiving a competitive and speedy offer from a buyer.
- Making the decision to sell your nursery
- Preparing information for buyers when selling a nursery
- Factors that could affect the sale of your nursery
- Getting your nursery prepared for selling
- Will you Capital Gains Tax on the sale of a nursery?
- Four options when trying to find a buyer for your nursery
- Frequently asked questions about selling a nursery
Making the decision to sell your nursery
Nurseries are a category of childcare in the UK that can range widely in terms of the size of the property, how many children they look after, and the services that they offer. But one common element is that they are places where registered professionals care for children 5 or younger.
As mentioned on Businessesforsale.com some estimates suggest that the industry is worth roughly £5.5 billion per year, with much of that revenue being generated from the fees that nursery owners charge parents. As population growth continues, nurseries will continue to be in high demand from parents, particularly in two-parent households where both adults work full time.
Some nurseries are aimed at children from the ages of 3 to 5 and provide some basic education ahead of these children attending schools when they’re older, and you might find these nurseries situated at the same location as a school, perhaps even connected to it physically.
Other nurseries will look after children from as young as six weeks old up to 5 years old, and are typically open from early in the morning until late evening – this is to help ensure that there is a professional to look after children in a household where the parents work full day jobs.
Both types of nurseries can be privately owned, or they might be operated by a local authority, a group of community volunteers, schools or other providers. They can be as small as having just a handful of children enrolled, or they might offer childcare to up to 150 children.
All nurseries need a property from which they can operate, and you might be the owner of either a freehold or leasehold nursery building. Freehold properties are those where you own the property outright and also that land on which it is built. Leasehold properties are those where you own the building for a set period of time, usually many years, and pay the freeholder an annual rent.
Regardless of which type of property you own, you might want to sell your nursery for one or several reasons. You could be looking to get out of the industry because the workload has become too stressful. Or it might be time to retire and the sale of your nursery will help generate funds for that goal. Alternatively, you might be planning a move overseas or elsewhere in the UK. Whatever the reason, this guide will show you how to hopefully get a fast and fair sale.
Preparing information for buyers when selling a nursery
As detailed on Gov.uk, one early step that you can take to help make the sale of your nursery smoother is preparing an information pack for buyers that should answer some of what will likely be their top questions, and the answers could affect your ability to sell.
Buyers want to receive all of this information upfront and they will likely look more favourably on you and the property if you’re able to quickly provide answers to their main queries. The longer that a buyer has to wait to hear back from you, the greater the risk that they may simply lose patience or interest in purchasing your nursery and instead look at buying other properties.
Prospective buyers who want to keep operating the property as a nursery will primarily be interested in financial data about the business, to see if it is worth taking it over.
For these buyers, you’ll want to provide as much data as you’re willing to share, such as you much revenue and net profit you make each, what you for utility bills and other expenses that a new owner would have to take on if they purchased your nursery.
You’ll also want to let potential buyers know whether you will be leaving any inventory behind as part of the sale – items such as desks, chairs and other tangible items that could help persuade someone to make an offer on your property if they plan on keeping it as a nursery.
Investors who are looking to purchase your nursery might want to shut down the business and redevelop the property for other purposes, such as converting it to commercial or residential property that they can then try to resell at a higher price or rent out to make money. This category of buyer will probably want to know whether you already have planning permission for the nursery building.
Planning permission is approval from a local authority to make large-scale physical changes to a property, such as adding an extension or demolishing part of it. It is a requirement for many properties throughout the UK, and applying for and getting planning permission can take a long time and cost a lot of money. That’s why some buyers who want to redevelop the nursery building may look more favourably on your property if you already have planning permission.
Factors that could affect the sale of your nursery
There are many different factors that can help or hurt your ability to quickly sell a nursery, some of them that will be within your control and others that are affected by other issues. It can be helpful to know about all of these factors before you attempt to sell, because it might give you some insight into why your property may not be attracting much interest from buyers.
Nursery profitability: Anyone who is looking to buy the nursery to continue using it as the same type of business will want to see if it is currently operating at a profit, because they will want to buy a viable nursery. Hopefully your nursery is doing well and if so you should endeavour to have as much financial data as possible ready to show buyers about this.
Desirable location: One factor that you’ll never be able to change about your nursery is its location. If a potential buyer is looking to purchase the property in order to redevelop it as other commercial or residential property, they will likely be more interested in your nursery if it’s in a high-demand area rather than somewhere that properties are not in much demand.
Economic conditions: Currently, the nursery industry in the UK is seen as a profitable and vibrant sector as mentioned on Nurseryworld.co.uk, which could help in speeding up the sale of your property, but if the economy worsens then that can make it harder to sell a property.
Property problems: If your nursery has some type of physical problem, such as subsidence or damage from a severe storm, then it can be harder to attract a buyer. That’s because they will be concerns about the amount of money that they will be required to spend to correct the problem in the event that they end up becoming the owner of the nursery.
Getting your nursery prepared for selling
The website Pacey says that in addition to collecting as much information as possible for buyers, there are some other steps that you can take to prepare your nursery for selling, depending on its current physical condition.
If your property has some type of structural flaw, such as dry rot, then you will have to decide whether to repair this issue before trying to find a buyer. This can require a lot of time, money and effort, but it can help to make buyers think your nursery is worth me than one where you don’t fix the problem before trying to sell. However, doing this work will not be possible for everyone’s time or budget, and you’re not required to fix any problems before selling.
Your alternative approach would be to sell the property "as is" without fixing the issue. Some buyers will view your nursery as being worth a lower price, but you can still get a competitive and speedy offer for it if you contact a quick buyer such as LDN Properties. These companies have extensive experience with making fair and fast offers for properties in any condition.
Whether or not your property has any kind of physical or other problem, you should still make sure that the nursery looks well maintained before attempting to sell it. First appearances are important, and a property that appears tidy will likely interest more buyers.
Inside the nursery, this means removing as much clutter as possible from rooms and cleaning them up to a good standard. Outside the property, this means removing weeds from any garden, replacing any missing roof tiles or broken windows, and similar work.
Will you Capital Gains Tax on the sale of a nursery?
When you sell your nursery, you could be liable for paying Capital Gains Tax. There are certain ways that you might be able to either eliminate or reduce the amount of Capital Gains Tax that you have pay on the sale of your nursery, so it’s always advised that you consult with a tax professional to learn more about whether this might be possible.
Four options when trying to find a buyer for your nursery
At the time you’re ready to seek a buyer for your nursery, you will have to choose from four typical options for selling – using an estate agent, using an auctioneer, using a quick property buyer, or selling on your own. There are obvious advantages with each of these selections, but some of the methods also come with rather noticeable unique disadvantages.
It’s recommended that you write down a list of the most important factors for the sale, such as how quickly you would like to find a buyer and whether you are willing to pay any commission. Then compare this information against the specifics of the four options outlined below, and this should help you find the approach to selling that best matches your unique wants and needs.
Using an estate agent
Estate agents will do most of the work in selling your nursery, such as preparing a listing that describes the property and includes photographs of it, advertising this listing in their office, online and in local newspapers, and organising viewings to show people around the nursery. They will also field offers on the property, hopefully all the way through to completion.
Using an estate agent can also be a very slow process, and you should not be surprised if you have to wait for more than an entire year before you are able to secure a buyer. This can make selling through an estate agent often one of the slowest ways to sell a nursery.
Using an auctioneer
A second way to sell a nursery is at an auction, where people will place bids of ever-increasing value on the property. This can be a gamble, because you never know the price at which the property might sell. And if it receives zero bids then it will not sell and you’ll have to start over with the process of trying to find a buyer for the property, adding even more time to the schedule.
There are two types of auction; traditional and modern. In traditional auctions, the listing will be advertised for many weeks and then the auction will take place on a set day, where people can place bids for a limited amount of time, and the top bid at the end of the auction is the winner who will buy your nursery. In modern auctions, your listing will be advertised for several weeks or months and people will be able to place bids on the nursery 24 hours a day, seven days a week, until the listing expires. Whoever has placed the highest value bid at the time that the auction listing ends will be deemed the winning bidder who is purchasing your nursery.
This can be the quickest way to sell a nursery, because the overall auction timeline will take several months. You’ll have a wait of many weeks or months between when you first enter the nursery for sale and when the auction takes place. And if the nursery sells, the buyer will then usually have an average of 28 days to complete their required steps to finalise the purchase.
You might be able to negotiate a shorter deadline for the winning high bidder to complete all of their mandatory actions, so you should individual auctioneers if this might be possible.
Note also that auctioneers will charge you commission if they manage to sell your nursery. This fee will be deducted right away from the sale proceeds, which will to your selling costs, making it a far from ideal choice if you’re trying to keep your selling costs low.
Some auctioneers might be willing to negotiate a lower rate of commission for your nursery, or make the winning high bidder pay some of your costs, so you should inquire about this.
Using a quick property buyer
LDN Properties and other quick property buyers are so-called because they have the financial ability to immediately purchase almost any age, condition, shape, size or type of freehold or leasehold property, including nurseries. They can typically complete the purchase of a property within a few weeks, because they don’t have to wait for many weeks or months to first get approval for a mortgage that will pay for the cost of the purchase.
And this speedy schedule of just a handful of weeks for buying your nursery also includes the time it takes to exchange contracts and pay you the full proceeds, which often makes using a quick property buyer by far the speediest way to sell a nursery.
Another advantage of selling this way is that trustworthy quick buyers will never make you pay any commission, so you can count on receiving the full proceeds from the sale. That compares favourably to using an estate agent or auctioneer, as you’ll pay fees with those methods, and makes using a quick buyer a great choice for owners who would like to keep selling costs down.
It also doesn’t matter if your nursery has any kind of problem whether that’s a physical issue or anything else. That’s because LDN Properties and other quick buyers have plenty of experience with buying problem properties "as is" without any fixes, such as vandalised nurseries, properties with squatters, homes with Japanese knotweed, flats that have low Energy Performance Certificate grades, properties that are suffering from storm damage, flats with cladding, and more.
Selling on your own
Selling without any assistance will require a lot of time, money and effort on your part because you’ll have to handle every step of the process. This includes creative and advertising a listing for the nursery, organising viewings, and hopefully taking an offer through to completion.
This is a huge amount of work and can be very stressful, and it’s not something that you’ll be able to only do in your spare time. That’s why it’s only suggested for those people who have experience selling properties, or have a qualified friend or family member willing to help.
The only clear advantage of selling this way is that you will not have to pay an estate agent or other third party any commission for finding a buyer for your nursery. But any cost saving you make this way could be wiped out by the expenses you’ll face with trying to sell on your own, such as the costs involved with creating and advertising a listing for your nursery.
Instead, you can consider selling your nursery to a no-fee quick buyer such as LDN Properties, because you can avoid paying any commission whilst also securing a sale within a handful of weeks. This is often a much swifter timeline than the average sale without any assistance, where you might be waiting more than an entire year before you’re able to get a buyer.
Top queries and answers about selling a nursery
Property owners wanting to have a fast sale sometimes need questions answering before deciding on the next steps. Here are seven of the main questions we’re asked by people thinking of selling a nursery:
Frequently asked questions when selling a nursery
Your nursery can be either a freehold or leasehold property, depending on the type of building in which it’s housed. Freehold properties are those where you are the outright owner of the building and the land on which it is located. Leasehold properties are those where you own just the building for a set number of years in exchange for paying the freeholder a ground rent.
There are a number of factors that could potentially make the sale of your nursey harder or easier, and not all of them are within your control. If the economy is suffering, it can make it more difficult to sell any kind of property. Alternatively, if your nursery is in a popular location and routinely makes a profit, this will be much more attractive to any potential buyers.
The speediest way to sell a nursery will usually be with a quick buyer, as these companies are able to complete all the steps required in purchasing a property within a handful of weeks. Selling through an estate agent or on your own might take more than a full year, whilst using an auctioneer will take at least many months in order to complete all the required steps.
If you sell your nursery through an estate agent or auctioneer then you will have to pay commission that will be subtracted immediately from any sale proceeds, which will add to your selling costs. However, if you sell on your own or sell your nursery to a legitimate no-fee quick buyer such as LDN Properties then you will not have to pay any commission on the sale.
