What happens if the management company goes bankrupt?
Most management companies, and certainly all of those listed on our web site, are very large companies that manage a portfolio of several hundred properties and as a result, any risk is divided among all their properties: those that do well will cover any loss made by those that do less well, due to a bad ski season, for instance. If the management company is in financial difficulty and the property is well-located, another management company can easily be found to take over the operation and continue the lease contract under the original conditions, so this should not have any effect on the property owners. There have been a few unfortunate occurrences in the last years where the new management company has been forced to reduce the rental income, which was too high for the business to be profitable. The conclusion to be drawn from this is to be wary of small management companies offering unrealistic yields; they may seem attractive at first but could result in the company’s inability
