Ready to sell your short-term rental for maximum profit? Read on for our experts’ top tips on how to make top dollar when selling your vacation rental home to another investor.
As a real estate investor, there may come a time when you wish to sell your short-term rental property. With the right strategies in place, getting above market-value for your vacation home is certainly possible.
Rental property owners with a solid grasp on the nuances of property valuation, maintenance standards, and marketing as an asset will be set up for a top-notch sales price. Our top Virginia Beach real estate team has compiled some best practices you can start putting into place right now to enhance your property’s resale value.
1. Meticulous Maintenance and Property Condition:
Like a well-oiled machine, a property with a comprehensive record of preventative maintenance is a bright green light to potential investors. Regular upkeep of major systems not only prolongs your property's lifespan but also instills confidence in potential buyers about its condition.
It’s never too late to start taking proper care of your property. To start, check your filters and vents regularly, watch out for moisture pitfalls, and set up a regular landscaping plan. Keep track so you can provide records to buyers – just like getting a list of a used car’s oil changes gives you confidence when making a purchase.
When it’s time to sell your short-term rental for maximum profit, have supporting documentation ready to show interested investors you’ve taken meticulous care of the property.
Some questions to ask yourself:
Do I have a strategic maintenance plan for the upkeep of my property?
Am I keeping up with preventative maintenance?
Am I tracking preventative maintenance?
Are there any major expenses I (or my buyer) should be preparing for, such as a new HVAC or roof repair?
Do my guests know what to do in the case of a maintenance emergency?
2. Financial Transparency:
Investors looking to purchase a short-term rental need to know what they can expect in terms of revenue and expenses. To sell your rental home quickly and for maximum profit, make sure your financial records are organized and easily transferable.
Things like average nightly rates, operating expenses, and vacancy rates are crucial. Firm numbers like these validate your asking price for your vacation rental home. Transparency in your property's financial health underscores its investment potential.
A comprehensive history of revenue and expenses can also make a big difference in the appraisal process if your future buyer is purchasing the short-term rental with a loan. If an appraiser doesn’t have a reliable rental history to consider, they will base the value of the property off long-term rental numbers from comparable properties. Often, these numbers are less than short-term rental income – which can lower the appraised value and affect how much money you can sell it for.
If you aren’t planning to sell your short-term rental immediately, consider ways you can maximize your profits this year. Minimize unnecessary expenses, and keep the property available for rent throughout peak season to highlight its income-generating potential on your official records.
Some questions to ask yourself:
Can you provide a profit and loss statement on demand?
Do you have a tool or process that will allow you to provide organized records of your nightly rent averages, vacancy rates, and operating expenses when asked?
Are there ways you can maximize your profits before you sell?
3. Turnkey Operations and Transferable Systems:
To make more money when you sell your short-term rental, create systems and processes that can be seamlessly transferred to a new owner.
A few processes to consider making transferable to maximize your short-term rental sale profit: guest WiFi access, property cleaning schedules, checklists, automated guest communications, and ordering supplies.
Create detailed “how to” documents for all of your transferable processes. List what property management systems you have in place and how the next owner can easily take them over. As a professional touch, stock the “owner’s closet” with supplies the new owner will need.
Some questions to ask yourself:
What systems and processes do you have set up to help you run your business?
How can you make it as easy as possible for a new owner to pick up where you left off?
Make a list of any vendors or contacts you work with regularly in your vacation rental business to pass along.
4. Robust Online Presence:
In today’s digital age, a strong online presence for your short-term rental isn’t just beneficial to your sale: it’s essential. A well-designed website or direct booking system – coupled with glowing online reviews – adds significant value when selling your vacation rental property.
Buyers want to see a property with a proven track record. Reviews and online testimonials from repeat guests show that your investment is revenue-generating and has a positive public reputation.
One quick note: Airbnb accounts aren’t transferable to a new owner. But you can still share a draft of the copy you’ve used with your buyer. Individual websites and direct booking sites can typically be transferred to the new owner for added value.
Some questions to ask yourself:
How would you rate your short-term rental property’s current online presence?
Do you have an easily navigable website? Can it be easily transferred to the new owner?
What do your online reviews look like currently? Do you need to ___ more?
Outline your marketing strategy to provide to the new owner to make their transition easier and promote their success (i.e. which booking systems have worked the best, how you have retained repeat guests, etc.)
5. Understanding Investor Roadblocks:
Understanding the potential buyer’s perspective is crucial to selling your short-term rental for more money. If your potential buyers are looking to use your property as a vacation rental business, their approach to purchasing will likely have some unique factors.
Short-term rental investors may find acquiring conventional financing difficult when they go through the standard appraisal process. Federally-backed loans have strict lending requirements. Many investors can benefit from non-conventional loan types like DSCR loans for purchasing short-term rental homes.
Short-term rentals can often appraise for over-typical market value because of the potential for increased revenue they generate. Do everything you can to show investors that the numbers align to prove they are taking on a successful rental property.
Note: We highly recommend consulting a top real estate expert who understands the complexities of getting financing approved for short-term rentals.
Some questions to ask yourself:
Does my property’s income history support the asking price?
Will a buyer be able to secure a conventional loan to purchase my property at that price?
Do I know which lenders will provide the best financing options for investors who want to buy my short-term rental?
Do I have documentation ready that can help buyers acquire a DSCR loan for my property?
The Bottom Line
Selling your short-term rental property for more money than the market average is a nuanced but achievable goal. By maintaining your property, being financially transparent, offering turnkey solutions, maintaining a strong online presence, and understanding the investor's viewpoint, you can significantly enhance your property’s appeal and value.
For vacation rental owners considering selling in the future, we offer free 15-30 minute consultations to discuss best practices and prepare your property for a sale ahead of time.
Remember, in the competitive short-term rental market, the added value of a proven business and the unique advantages of your property will attract premium offers. Let CGP Real Estate be your partner in navigating this journey, making sure your investment reaps the rewards it truly deserves.