The cost and value of a school will indeed be a commercial and financial matter. It might be calculated by reference to the school’s turnover or annual surplus (or profit), or take into account the value of any property transferring. The treatment of parent deposits and school fees will need to be agreed.

Steps to Buying a School

Also note there may be a formal process to select the buyer and to determine who can pay the best price, or offer the best all-round option as a purchaser. For instance, a buyer with the ability to continue to run the school, and also develop and expand it in a sympathetic way, may be a concrete factor in deciding the identity of the buyer. Buyers may also be international, including from China and the United States.

Howbeit, once the value has been decided, there are options around how payment will be structured. Have it in mind that it does not have to be one full upfront payment on the date the sale completes. A price is not settled until the payment dates and structure are also agreed so it is very imperative to note down all the details at the heads of terms stage.

Note that the school’s owner or its governors (for charitable schools) will indeed want to make sure that ‘fair value’ is paid or received for the target school. External professional valuations can also be very crucial in this process. This is more or less the case for any property included within a sale but also applies to other high value assets transferring and, of course, to the value of the business as a going concern.

Professional valuations notwithstanding, a private sale cannot be entered into without a degree of risk and compromise on both sides. Have it in mind that the agreed price will reflect market value but also the relative bargaining power of the parties.

To a certain extent, governors will be expected to understand and accept the commercial reality of the situation. Nonetheless, they cannot be expected to do so without a clear demonstration that all options have been considered and the commercial and financial risks mitigated as far as possible.

Estimated Cost of Buying a School

In 2020, the median elementary school in the United States costs $242.55 per square foot to build. Median spending was $52,017 per pupil and the median elementary school provided 188 square feet for each student. A median elementary school reportedly designed for 624 students and encompasses 84,700 square feet will cost around $16,269,543.

The median cost of a middle school is $261.96 per square foot. Median spending per pupil was $54,635 and the median middle school provides 173.4 square feet per student. The median number of students in middle schools built in 2020 is 612 and the building size is 118,500 square feet. The cost is $26.5 million.

The median high school cost $45 million and provided 173,727 square feet. It was designed to accommodate 1,000 students. The median high school provides 180 square feet per student at $58,000 for each student. The cost per square foot was $311.29.

4 Factors to Consider When Buying a School

The current situation caused by Covid-19 has proven to be extremely challenging for schools and if this has led to, or exacerbated financial difficulties, a sale may be one of the options that a school will need to consider. However, before getting too far in the process, here are factors to consider;

  1. Consider a merger

An alternative to the sale (particularly for charitable schools) is a merger with another charity (which may be a single school or a foundation operating a number of schools). Note that a merger will share many features with an asset sale except for the fact that money does not usually change hands on a merger.

Here there is no purchase; instead, the transaction is essentially a gift from one party to another, with terms and conditions attached. The continuing school more or less assumes all the liabilities of the charitable school, handing over its assets and its undertaking, which makes due diligence by the continuing school very necessary.

However, the disadvantage of a merger is that it can take longer to arrange than a sale. Nonetheless, where a suitable charity can be identified as a merger partner, a merger will result in a charitable school continuing to be operated by a charity.

  1. Confidentiality

Have it in mind that sale can be a very unsettling time for staff, parents, and pupils – and it is, without doubt, worse where a transaction is proposed but does not proceed. It is therefore advisable that every process is extensively managed to ensure that even the fact that a sale is being considered is kept confidential to a small group of people.

All parties will want to ensure that all interested persons are aware of the importance of confidentiality and that they sign up for robust non-disclosure agreements. One very common challenge is that as part of the process the buyer might intend to carry out due diligence and this will more or less involve the preparation of a data room containing information about all aspects of the school.

Note that it can be hard to collate all this information without involving key employees to provide it, but those involved should be as limited as possible. In the current circumstances due diligence is likely to take a bit longer than usual and this should be factored into the timing.

  1. What is being sold

Always remember that a school is not in itself an identifiable legal asset. You will be expected to define exactly what will transfer from seller to buyer and the first question to ask is whether the sale will be of the company out of which the school is operated or of the assets which make up the school.

  • Charitable schools

The sale of a charitable school to a commercial company cannot be carried out as a company sale and generally occurs as an asset sale. Note that membership rights in a charity (just like shares in a commercial company) do not confer any proprietary rights on the holder and the assets within the charity must be used exclusively for charitable purposes.

As a result, a charitable company limited by guarantee cannot be sold outright, although its assets can be sold. The sale of a school run by a charity must therefore proceed as an asset sale. Where the asset is sold to a commercial company, the market price must be paid.

  • Asset sale

An asset sale allows both seller and buyer to decide which assets will be added within the transaction. It is a common assumption that everything will be sold – the property out of which the school is operated; all staff, parent, and supplier contracts; all equipment, and so on. However, some assets may not transfer, particularly in a transaction between two schools. An asset sale will generally be more complicated than a company sale but is unavoidable if the seller is a charitable company.

The employees of the school will transfer automatically (under the Transfer of Undertakings (Protection of Employment) Regulations but there will need to be notifications and consultations with employees as part of the sale process. There will also be the need to obtain regulatory consent (from the Department for Education) and possibly consents from third parties to the transfer of assets.

  • Company sale

Generally, a company sale is preferable for a seller, where this is possible. Note that this is because a company takes with it all of its historic liabilities (although mergers of two charitable schools usually involve the recipient school taking on all historical liabilities of the other). The parties can of course agree to carve outs from this standard position in the sale agreement, for example through warranties and indemnities.

However, as the new owner of the company, the buyer will be liable in the first instance (financially and practically) for any issues arising after completion. This is in contrast to an asset sale where a seller will usually retain liabilities relating to the period prior to completion and the buyer will take on the risk from that point.

  1. Warranties and Indemnities

The seller and the buyer will also want to agree, at a high level, what warranties and indemnities will be on provided from the seller and the level to which they will be subject to agreed limitations on time and value. The use of warranty & indemnity insurance (and who will pay for it) should also be considered as this is one way in which a seller and a buyer can mitigate the risk on a sale.

Conclusion

Buying or selling a school is a material undertaking and it can be tempting to dive straight into due diligence and practical considerations. Howbeit, it is not in either party’s interest to invest too much time and money in the process before the fundamentals are agreed upon.

Nor is it advisable (including in conversations with governors) if key terms are left for consideration late in the day when one or both parties may be under pressure to ‘get the deal done’. Hopefully, the information presented above has given you an insight into some of the options available to you so that a clear agreement can be reached on the scope and value of the transaction before more detailed discussions begin.

Frequently Asked Questions

  1. How Much Does It Cost To Buy A School?

In 2020, the median elementary school in the United States cost $242.55 per square foot to build. Median spending was $52,017 per pupil and the median elementary school provided 188 square feet for each student. A median elementary school reportedly designed for 624 students and encompasses 84,700 square feet will cost around $16,269,543.The median cost of a middle school is $261.96 per square foot.

  1. How Can Someone Buy A High School?
  • Meet with a School Sales Business Broker
  • Review Business Information.
  • Meet with the Seller
  • Make an Offer
  • Negotiate the Offer
  • Perform Due Diligence.
  • Draft the Definitive Purchase Agreement
  • Close the Deal.
  1. How Do You Create A School?

Creating a standard school is a lengthy and complicated process. The Steps to take include;

  • Identify Your Niche
  • Form a Committee
  • Find a Home
  • Incorporate
  • Develop a Business Plan
  • Develop a Budget
  • Tax-Exempt Status
  • Choose Key Staff Members.
  • Solicit Contributions
  • Identify Your Faculty Requirements
  • Spread the Word
  • Open for Business
  • Orient and Train Your Faculty
  1. Do Schools Increase Property Value?

According to the National Bureau of Economic Research, there is a strong correlation between school expenditures and property values. A report titled, “School Spending Raises Property Values,” found that for every dollar spent on public schools in an area, home values increased by $20.

  1. How Much Money Do You Need To Start A School?

Starting a private school from scratch is an expensive and challenging undertaking. On average, starting a private school in the U.S. costs $1,000,000. The same undertaking in the U.K. costs, on average, £930,000.

  1. How Much Do School Owners Make?

The national average salary of a Private School Owner in the United States is $72,850.

  1. Should a School Have Room For Growth?

Yes, a school with room for growth encourages a collaborative atmosphere that benefits both students and the administration.

  1. Does School District Matter When Buying A House?

Buying in a good school district does matter and, with more stability in home prices and more savings from costly private school education, it usually works in favour of the buyer. According to reports by the National Association of Realtors (NAR), more than half of homebuyers with children under 18 cited the school district as an influencing factor in where they chose to buy.

  1. How Do You Search By School On Zillow?

To leverage the tool, Zillow users just have to click on the graduation cap icon on the map, and choose to search by elementary, middle or high school boundary – or any combination of the three. Users can also narrow their search by GreatSchools rating, and Elect to search public schools, private schools and/or charter schools.

  1. How Much Does It Cost To Send Your Kid To Public School?

In the United States, parents spend from $1,017.37 to $20,521.90 for public school education, depending on grade level. Twelfth grade is often the highest cost, due to greater involvement in activities and preparing to write standardized college entry exams.

  1. How Do You Start Kindergarten School?

If you are up for starting a private kindergarten, here are steps to consider;

  1. How Much Does It Cost To Start A Preschool?

The simplest business model to start a preschool is to run it out of your own home. This way you could accommodate up to four or five children without having to pay rent for a separate facility, and your only monthly expenses would be food, toys, and other educational materials. Total start-up costs for a home preschool could range anywhere from $1000 to $4000.

Here, you can expect to spend a one-time cost of up to $300 or $400 per child for general supplies, and an additional $80 to $100 a month for food. You may need to get other different devices, like a child lock gate, and other safety locks for drawers and cabinets. However, it shouldn’t cost much more than $100.

  1. How Do You Find Out What School District Your House Is In?
  • Log in to your Zillow app.
  • Type in the location desired into the address bar.
  • Select “Filter” to the top right of the map.
  • Toggle “Schools” to ON and choose your school criteria.
  • Check the box for ‘Only show homes matching all criteria’
  1. How Do You Get Into A Public High School You Don’t Live By?

It all depends on your state and local school district policy. In most cases you are expected to live with a legal guardian at the house located inside of the district limit. You can’t just own property in the town and become enrolled. You must live on the property. However, some school districts span more than one town/city, so sometimes students in Town A will be expected to attend Town B High School.

  1. How Much Do Parents Spend On School?

In the United States, parents spend from $1,017.37 to $20,521.90 for public school education, depending on grade level. Twelfth grade is often the highest cost, due to greater involvement in activities and preparing to write standardized college entry exams. In the private school system, these costs are much higher. On average, parents can expect to spend around $8,787.37 to $33,551.90, depending on grade level.

  1. It Is Possible To Buy A Private American High School?

Yes, in fact, given the number of high schools in danger of closing, it is quite easy these days. The hard part is getting approval from the government and accreditors for the transaction.

  1. How Do You Start A Play School At Home?

There are so many great reasons to start a preschool in your home. If you’ve been considering opening your own preschool business, here are essential steps with everything you need to know:

  • Obtain a family child care license from your state.
  • Decide on a business entity and apply for a business license if required in your state.
  • Create a business plan.
  • Choose a philosophy and curriculum.
  • Design your learning environment.
  • Write policies and procedures for a handbook.
  • Use an online platform to manage your business.
  • Hire any assistants
  • Name and market your preschool to your community
  • Get insurance
  1. What Is A Good Public High School Advice?
  • Get a Planner
  • Understand Procrastination.
  • Keep It Real
  • Stay Focused
  • Get Out of Your Comfort Zone
  • Make Yourself at Home.
  • Get Involved.
  • Make Useful Connections.
  1. Should I Buy A House In A Bad School District?

If you don’t have kids, buying a home in a bad school district can save you money and allow you to buy a nicer house. However, many real estate practitioners argue that it’s better to buy a home in a good school district even if you don’t have children because those areas tend to hold their value, and because it may be easier to sell your home when you move.

  1. How Do You Apply To A Public High School From A Private?

If you’ve decided that you want to transfer your child from private to public school, here are few steps to take;

  • Wait until a natural break in the school year to make the switch. Starting your child in a new school at the start of a school year or semester will be easier than switching him mid-semester. Starting at the beginning will mean that your child starts at the same level as other students.
  • Talk to your child’s teacher so he knows that your child is transferring from another school
  • Ensure that your child is fully prepared when it comes time to make the switch.
  • Help your child keep in touch with friends from his old school. Switching to a new school can be difficult for a child and it may take him some time to make new friends.
  • Think about hiring a tutor. If you are worried that your child might fall behind or have trouble making the switch to a new school, think about hiring a tutor to help him with his class work.
  • Be supportive of your child’s needs and interests. Making the switch to a new school can be challenging and some children will struggle more than others. Make an effort to support your child as much as possible, encouraging him to take part in school activities and to make new friends at his new school.
  • Become involved with your child’s school. Join the Parent Teacher Association (PTA) and try to volunteer at the school as well, if such an option exists. The more involved you are at your child’s school the more you will be able to help him during the transition.
  1. How Can You Start A School In Rural Area?

A robust, quality education system in rural areas is the need of the hour, today. Generally, families shift to urban areas to provide better education to their children as the quality of education in rural areas is not up to the mark. Nonetheless, to start a school in a rural area, here are steps to take:

  • Prepare a blue print.
  • Develop a budget.
  • Associate with a trust or society.
  • Finding a suitable land
  • Start early
  • Approach the Department of Education for recognition.
  • Recruiting qualified staff
  • Promotional strategies
  1. How Do You Start An Online School?

Online education is undergoing a massive growth spurt. The number of students taking online classes increased 24% in the last year. And the numbers are only expected to climb. To start an online school, here are steps to consider;

  • Identify your audience
  • Pick your cornerstone content
  • Plan your lessons
  • Create your online school
  • Market your school
  1. Where Are Your 3 Main Geographical Areas For School Purchase?
  • Washington
  • San Jose
  • Ann Arbor
  1. Can You Negotiate Private School Tuition?

Yes, many schools have a “cushion,” with room to adjust rates as necessary, particularly if you are thinking of sending more than one child to the school. There may also be a credit available in exchange for a certain number of volunteer hours, so be sure to inquire about this possibility as well.

  1. Can Online School Start Anytime?

Yes, you can enrol for an online school program any time that you have your prerequisites and finances in order. Often programs will fill up very quickly; therefore, it is best to sign on early, although you may have to wait an ample amount of time for classes to begin.

  1. How Much Do School Districts Affect Real Estate Prices?

Homes in the best school districts, on average, sell for higher prices than similar homes in less-popular school districts. According to reports, on average, housing costs are nearly 2.5 times higher near high-scoring public school districts than near low-scoring districts.

  1. Should You Buy or Pack Your Child’s School Lunch?

The decision whether to pack for lunch for your child or purchase lunch in the cafeteria depends on several factors. The quality of the meal, convenience, cost, and your child’s preferences all come into play. Nonetheless, only you can really make the best decision for your child and your family.

  1. Is It Bad To Live Near A School?

Ultimately, living near a school could be a positive thing, or it could be a decision you end up regretting. However, it is imperative you research and consider the pros and cons, but also vet your other options in the neighbourhood you’re looking at.

If the school-adjacent house you’re interested in has certain features you can find in a property a few blocks away, it may be worth putting a little distance between your home and the throngs of children that grace that street every weekday.

  1. Is Running A Private School Profitable?

Yes, running a private school is very much profitable, however, be careful about your planning, marketing strategy, mission and future vision. Once your reputation in this business fall, you cannot and never rebuild it.

  1. How Do People Afford Private School?

Just the same way we afford every other incentives and amenities of life. However, if you are considering a change in your child’s education, here are practical and field tested options for affording private school on a tight budget:

  • Choose Carefully
  • Apply for Private Scholarships
  • Apply for State Voucher Programs
  • Take Advantage of State Tax Credit Programs
  • Negotiate Tuition Rates
  • Take Advantage of Rewards Programs
  • Get Family Assistance
  1. If A High School Student Transfers to a Private School from A Public School, Can They Still Be a Student at the Public School?

No, because as soon as your application is approved at your new school, you are a full-fledged student there.

  1. How Much Does A Used School Bus Cost?

A used school bus for sale should be around $4,000 to $10,000 for a bus with 120,000 – 180,000 miles. A used school bus for sale with 20,000 – 50,000 miles can be anywhere from $15,000 to $40,000, or more.

  1. Can You Be A Kindergarten Teacher Without A Degree?

Technically, yes. Most public school districts require kindergarten teachers to meet specific minimum education requirements, but independent schools with kindergarten programs and private schools are generally free of such regulations. In most states though, you will need to complete an alternative teacher preparation program.

  1. How Much Do You Need To Earn To Afford Private School?

In the United States, you need an income of at least $213,000 a year in order to be able to afford to send two children to private school.

  1. Will You Own Or Rent The Land Your Home Is On?

Basically, with the purchase of a home, you are buying the land and the property, the house that it’s being built on top of, as well. In fact, you are buying the lot and any improvements (structures) on it.

  1. My Local Public High School Won’t Let Me In, What Do I Do?

If a child is facing suspension or expulsion, then it is advisable to seek assistance from an experienced education attorney before the child serves the suspension or as soon as possible. An education attorney will:

  • Explore dismissal of the action.
  • Request that the school assign alternative punishments.
  • Ensure accurate educational records.
  • Appeal and/or request reconsideration of the suspension decision, if necessary.
  • Request and identify other services in the school or community to help your child, such as counselling, testing for learning disabilities, and tutoring.
  • Prevent discrimination against your child.
  1. Are Houses Next To Schools Cheaper?

No, many home shoppers willingly pay a premium to live near a good school for their children. One survey of potential home buyers found 20 percent of them would pay up to 10 percent more than their budget for a home near a good school, and up to 10 percent were willing to increase their budget by 20 percent.

  1. What Factors Affect The Price Of A Home?
  • Neighbourhood comps.
  • Home size and usable space.
  • Age and condition.
  • Upgrades and updates
  • The local market.
  • Economic indicators.
  • Interest rates.
  1. How Does Teaching In A Private High School Compare To Teaching In A Public High School?

Teaching jobs can be found in both the public and private sectors, but most teachers generally apply for positions in one or the other. This is because the two are quite contrasted and new teachers tend to use these disparities to determine their best fit.

  • Salary: Public school teaching salaries are relatively constant. Private school teachers generally earn less than their public school counterparts, with teachers at parochial schools at the lowest end of the salary range.
  • Education: A minimum of a Bachelor’s degree in Education is needed for all public school teaching positions today and Mathematics and Language Arts concentrations are commonly most appealing. While the credentials required for private school teaching positions are not as consistent. Some private schools might mandate that all of their teachers have Master’s degrees or particular certifications, while others might not require official teaching degrees at all.
  • Class Size: While public school districts prefer to keep class size down, overcrowded classes due to teacher shortages and underfunding are common in public schools.
  • Curriculum: In public schools, state mandates determine subjects offered and topics covered. Most public school curriculums are constructed around state standards and provided to teachers. Private schools are allowed to choose and use their own tests and lesson plans and some private schools don’t have curriculums at all.
  • Diversity: The law requires public schools to admit all students without discrimination. Because of this, teachers in public schools tend to teach a diverse population of students in terms of race and ethnicity, socioeconomic status, levels of need, and more. Private schools are allowed to choose which students to admit.
  • Resources: Public schools are tax-funded but different districts receive different levels of funding. While in private schools, the price of attendance often becomes a factor in determining the socio-economic makeup of the student body, although some private schools offer scholarships to students with demonstrated financial need.
  • Parental Involvement: The degree to which parents and families of students in public schools engage in their children’s education is entirely dependent on a school’s community and population. Private schools naturally see parents that are more involved in their students’ lives because it takes more effort to get students into private schools in the first place.
  1. How Can You Make Your Online School Better?
  • Build a personal connection with your students.
  • Motivate your students.
  • Help students maintain focus.
  • Create a sense of community.
  • Make discussions meaningful.
  • Increase student engagement.
  • Address equity issues.
  • Identify and support struggling students
  1. Can You Do Online School on Your Phone?

Yes, for an online course, the computer or device you use must, of course, connect to the Internet. Some schools may use platforms that work on mobile devices, but not all schools do.

  1. Do You Need A CDL To Drive A School Bus?

Yes, you will need a Class B CDL to drive school buses, city tourist buses, and private event buses. You can gain the additional testing for P and S endorsements only after completing your CDL.

  1. Are Public Schools In The USA Free?

Yes, all children in the United States have access to free public schools. But while public education is generally free, there are some fees associated with public schools, including the purchase of books, equipment and uniforms.

  1. Why Are Public Schools So Expensive?
  • Reduced state funding
  • Surge in demand
  • Need for more teachers and members and money to pay them
  1. What Is The Advantage Of Going To A Prestigious Private High School Over A Prestigious Public School?
  • Smaller class size
  • Higher Standard of Conduct
  • Success in Continuing Education
  1. Why Is Private School So Expensive?
  • Private schools do not receive substantial funding from state governments
  • Overhead cost to run the school
  • Because it is a for-Profit business
  1. What Is The Biggest Public High School In America?

Brooklyn Technical High School

  1. Where Are The Best Places To Buy Used School Buses?
  • From schools
  • The Facebook marketplace.
  • American Bus Sales.
  1. Why Do So Many Parents Pick Up Their Kids Nowadays?
  • Convenience
  • Security
  • When school doesn’t provide transportation
  • After-school activities
  • Before school close appointments
  1. How Can You Run A Background Check Online?
  • Using search engines
  • Using social networks
  • Discovering contact information
  • Using criminal databases
  • Using public records
  • Viewing financial history
  • Looking up web domains or IP addresses
Joy Nwokoro