Selling a short term rental (STR) investment property comes with unique challenges and considerations that differ from selling a traditional single-family home. From managing guest bookings during the sales process to preparing key financial documents, a well-planned approach can help maximize your property's value and streamline the transaction. Here’s what you need to know to successfully sell your STR property.
Managing Guest Bookings vs. Showings
One of the first decisions you need to make is whether to keep your STR listing live on platforms like Airbnb and Vrbo while your property is on the market. This decision can impact how easily you can show the home to prospective buyers and whether you’ll need to compensate guests for canceled stays.
Keeping the Listing Active: Maintaining bookings can demonstrate strong revenue potential to buyers, but it can also limit showing availability. Unfortunately, buyers and guests are both preferential to the weekends. This may make it challenging for prospective buyers to see your home. Make sure you have strong videos to convey the property to these buyers in the event the property is booked and unable to be shown.
Pausing or Closing the Listing: Temporarily deactivating the STR listing can make showings easier but may result in lost income. It's important to consider the real estate sales market with this option. Understand the average days on market for homes like yours and weigh the financial cost of temporarily blocking off your listing in order to facilitate showings at your STR investment.
Hybrid Approach: Some sellers opt for a middle ground—keeping the listing live while strategically blocking certain days for buyer visits. Be upfront with potential buyers about your showing availability and communicate with guests to avoid scheduling conflicts.
Essential Documents for a Successful Sale
To attract serious buyers, you need to present comprehensive financial and operational data that demonstrates the investment’s profitability. Here are the key documents to prepare:
Profit and Loss Statements – A well-organized P&L statement from the past 12-24 months can highlight revenue, operating expenses, and net income.
Revenue Exports from Listing Platforms – Most platforms, such as Airbnb and Vrbo, allow you to export your earnings data. Buyers will want to see gross revenue trends, average daily rates, and occupancy rates.
Major Expense Breakdown – Detail major expenses such as any capital improvements as well as reoccurring fees such as property management fees, cleaning costs, maintenance, utilities, and taxes.
Future Booking Report – If your property has upcoming reservations, providing a snapshot of future bookings can help buyers see revenue potential immediately upon purchase.
Guest Reviews and Superhost Status – Positive guest feedback and platform status can add credibility and enhance perceived value.
Local STR Regulations – Having information on zoning, licensing, and permitting requirements readily available can help address buyer concerns and prevent surprises during due diligence.
How to Price Your Short-Term Rental Correctly
A common misconception among STR owners is that their property should be priced based on its income-generating potential, similar to commercial real estate using a cap rate. However, most STRs—especially single-family homes—are valued based on market comps, not cap rates.
Use Single-Family Home Comps: Your STR will likely be priced according to comparable sales (comps) of similar homes in your area. Analyzing recent sales of similar properties will provide a realistic market value.
Highlight STR Income as a Bonus: While STR revenue can be a compelling selling point, it’s typically seen as an added benefit rather than the primary valuation metric.
Consider STR-Specific Buyer Appeal: If selling to an investor, the revenue potential can be used to justify a higher asking price. However, be prepared to demonstrate stability and long-term viability.
Final Thoughts
Selling an STR investment property requires balancing ongoing operations with a smooth transition to a new owner. By keeping detailed financial records, navigating showings strategically, and pricing your property appropriately, you can attract serious buyers and maximize your sale price. Whether you’re exiting the STR market or reinvesting in a new opportunity, a well-executed sales process can ensure a seamless transition for both you and the buyer.
