How to Sell your Vacation Rental
Believe it or not the short term rental booking platforms do not allow you to transfer your property information to a new owner. This tends to make selling your Short Term Rental (STR) property a bit more complicated then a traditional sale.
Deciding to Sell
Once you decide to sell, you may want to think about pausing your listing. You may still have guests that have booked before the pause stay but this will ensure you don't have future bookings interrupt possible home tours. Some sellers decide to pause their stays after they receive an accepted offer on the property. Either way, it’s important you know to do this at some point during the transaction.
You should consider selling the property as a turn-key rental along with the furniture and housewares. This may make the property offering more valuable as a larger range of investors will be looking at it. You will also want to consider providing the names of housekeepers, maintenance companies, property managers, etc to support your sale.
If you are selling your STR as a going-concern business, you will want to understand the market in your area and what investment properties are selling for. In many cases, a “capitalization rate” may determine the value. This is calculated based on the annual rental income produced to the current market value. So an STR netting 100,000 a year that is worth 1 million dollars has a 10% “cap” rate. Investors tend to seek investments around 10% cap mark.
Manage After the Sale
If you have other rentals and want to keep your host status on the booking platform, you may want to consider not canceling any bookings after the sale and managing them for the new owner. This will ensure a smooth transition for the guests and not cause any cancellations, thus keeping your super status. Generally you can charge the new owner a fee for these services as well. 5% - 30% is average based on what you tend to do for the guests.
If you have any questions regarding selling or buying a short term rental property, feel free to reach out to us here. We are happy to help!