Selling your fantastic Airbnb rental?

[Stan-and-Jan0]

Greetings Airbnb Hosts - We are selling our multiplex (4 rentals) in Bend, Oregon to relocate to Boise, Idaho (for multiple reasons) where we will be continuing as Airbnb Hosts with some new properties. If you are selling your rental/s and you depend on Airbnb as one of your booking platforms there are some things you should be aware of. As I understand it, you cannot transfer any information on your profile or listings to someone elses profile or listings on any of the home/vacation rental portals. Listing details, calendars, and reservations all go away when the property changes ownership.

The good news is that all of your profile details including your reviews and stats stay with you. So all that hard work you did to become an amazing host moves with you.

So what do you do to help make sure your guests keep thier reservations with the new owners?

In the case of Airbnb, they will cancel all reservations when the property changes ownership with instructions on how to make new reservations with the new owners. The new owners must have thier listings ready to go and work with Airbnb so they can accept the new (previously cancelled) reservations. They should be willing to keep the same rates as the current reservation or risk losing future income so its best to provide a list of reservations with the rates the guest agreed to for the new owners.

To go a step further, when you sell, reach out to your guests beofre the ownership transfer. Let them know what's coming. Make sure you have thier current contact information like the best phone number and email address so you can provide that information to the new owners so they can reach out and help with making a new reservation.

I searched for information about this process and apparently it doesn't happen too often, or if it does, there's no clear explanation of the step-by-step process. Are we the first ones to go through this process? Sure seems that way but if anyone has actually gone though this process please add you experience to this thread and tell us how it went.

Remember to give a thumbs up if this information is helpful.

Cheers - Stan

[Stan-and-Jan0]

Hi Helga - I found it.  Thanks!

[Robin4]

@Stan-and-Jan0

Hi, I have been watching what has been said here on this thread and I can see both sides of this argument. @Stan-and-Jan0 you would prefer a clean break from your old property and @Helga0 is offering a way of transitioning which makes sense.

But you are both considering it is like a business where you are simply transfered bricks and mortar and the goodwill that might have been built up.

Airbnb don't look at it like that, many guests choose to book certain listings because of the hosts past, in fact the entire platform revolves around the hosts past with the review system. Most hosts are reticent to take on a 'newbie', and possibly the same can be said of guests. Many of them would not choose to stay with a host who does not have a proven track record.

As far as Airbnb are concerned it just opens up another can of worms where guests complain they didn't get what they thought they would when they booked.

It's not like the transfer of ownership of a Hilton, a Hyatt, a Sherraton where, for the guest, nothing differs. People do book with Airbnb for the price but they also book for the experience and the host is a major part of that experience.

I think Airbnb have it right at the moment. Make the break and let the guest make the decision of whether to continue, or look elsewhere.

Cheers.....Rob

[Stan-and-Jan0]

Hi Rob - Obviously Host reviews are key to helping Guests decide who to book with but they also look at the positive comments on the property and accommodations. Location is a big factor. The condition of the property and the furnishings are a big factor. People love the location, the furnishings and of course they really appreciate great hosts like us but the fact is that it is not only real estate but also a business. We have a great reputation as hosts but so does the property and there's value in that.

With that being said, Airbnb's policies on how they go about communicating with the guests when they cancel the reserevations and give them the opportunity to rebook is not clear and we have questions about it. We are OK with the fact that there's no way to transfer the reservations or anything else regarding the property like calendars and listing details but Airbnb needs to have a policy in place for such circumstances that is easy to understand so the process goes smoothly. We want the new owners to be successful and for the guests to feel comfortable rebooking with the new owners.

There is a better way to handle situations where an entire home or in our case multiple homes are being sold not only as real estate but also as a business. This is a very young industry on the rise and Airbnb should make some considerations and publish policies in thier Terms and Conditions to make it understood and as simple and streamlined as possible as more people sell and buy short-term and vacation rentals as a business.

Thanks for the feedback.

Stan

[Tasha29]

A question which keeps coming to me is, Are people really successfully selling their current Airbnbs as a business?  It seems to me people would pay more for buying an established business, and where the business is centered around a home, I would think the goal is to keep overhead cost low and income high.  So a cheaper home turned into a new Airbnb would be a fiscally smarter decision.   How many of you have seen an Airbnb sold as a business?  How many of you would prefer to buy an established Airbnb vs starting new?  As sellers, would you keep all the furniture in the home?  Or let it be part of the business transaction?

I really appreciate the advice and info.  Thank you so much for your time.

[Stan-and-Jan0]

Hi Tasha - Just based on my experience, to answer your question in simple terms, a rental (short-term or long-term) is generally valued differently than a single family home. Rental income from a property is generally used to establish at least  portion the value of the property.

The key to valuating the rental property is coming up with the CAP Rate. Here's a brief explanation:

"A cap rate is a calculation used to determine the profitability of a real estate investment. In essence, the cap rate is the net operating income (NOI) of a property in relation to the property’s asset value.

Real estate investors and other players in the real estate sector use the cap rate calculation to estimate the return on an investment.

To calculate the cap rate of a property, you simply divide the NOI by the value of the property."

You can do a search for more detailed information on the importance of CAP Rates and how to coalculate it.

The challenge with selling an Airbnb or short-term rental as a turn-key business is that the buyer will not be gauranteed any existing bookings nor will they inherit any existing property profile listings or licensing. I advise you to search out a licensed Real Estate Agent that is very familiar with investment properties. They will be able to help valuate the property and help you navigate through a sale. 

IMPORTANT: There are also significant tax implications when selling a rental property. Capital gains comes into play whether you are selling a rental property or selling your home that you have rented any part of. Consult with a knowledgeable tax consultant prior to selling so you know what you're tax liabilities will be. They can be significant.

Please give a thumbs up if this was helpful.
Cheers,

Stan

[Leslie----Tony0]

far better than suggestion number 1

[David1002]

I have my place for sale and I'll have to personally inform every renter.  Airbnb can't help with much of anything.

[Helga0]

In the traveler section, there is just a guest on the receiving end of a potential sale. He discovered his host put his house for sale and is worrying for his long term in advance booking with strict cancellation.

There should definitely be a procedure or at least a clear policy on that.

[Dave-and-Deb0]

Hi @Stan-and-Jan0,

Airbnb actually does have a procedure for this but it is not really made public in any help articles.

Airbnb does not allow you to transfer your listing, reviews and references. The other person would need to create their account and start a new listing from scratch.

If you have current reservations, you would need to contact them all via the Airbnb messaging system and see if they would be willing to keep these reservations with the new owner of the listing.  Once you have confirmed with all your existing reservations, the new host would then contact Airbnb.  A member from the Airbnb team will then look through your messaging with these guests, cancel the reservations penalty free to you, and allow the guests to rebook with the new hosts.

To get the new host started, you could provide him/her with a reference.  Here is a guide for providing a reference: https://community.airbnb.com/t5/Tips-Tricks/References-A-Community-Help-Guide/m-p/20222/highlight/tr...

[Stan-and-Jan0]

Hi Dave and Deb - Thanks for the comments. That is pretty much what we figured we needed to do but it took some digging. Much appreciated. Stan and Jan

[Niki30]

Thanks Dave and Deb. I had called Airbnb and they did not mention the process you described as far as "no cost to me" if I reach out through Airbnb to inform guests of the property sale and that the buyers are willing to honor the reservations. They told me I had to cancel the reservations myself. They certaininly don't povide the hosts with much support.

Thanks for the providing information on the process.

[Terry98]

Stan, I am going through the same thing right now.  I am selling my Florida condo but fortunately I had blocked off most of my calendar so there are only three reservations that will occur after the ownership change.  Working through my real estate agent, the new buyers have agreed to let me manage and collect the rents for those reservations, pay the cleaners, pay the local bed tax to our taxing authority and remit the balance to the new buyers.  To make end of year accounting less complicated, I have agreed to pay the income tax on all the rental income.  This is pretty clean and easy to do if there are not a lot of reservations after the ownership change and it doesn't require the new owners to decide immediately if they want to become hosts.  

[Stan-and-Jan0]

Hi Terry - Thanks for the comments. We have learned a bit since the original post. Your plan won't work for us. We continue to take reservations and we have dozens of reservations for the summer because we depend on the income and we don't know when the property will sell. When our property sells we will need to inform all guests of the change, cancel all the reservations with Airbnb's assistance and provide the buyers with the guest information so they can reach out to rebook them. Airbnb stays neutral in helping guests rebook so there's no guarantees a guest will rebook with the new owners. There is currently no way to make a smooth transition with Airbnb reservations from one owner to the next. So it will be up to the new owner to communicate and be proactive in rebooking those cancelled reservations.

Airbnb's perspective is that they want to be fair with other hosts in the area and can't or won't play favorites by assisting in getting the guests rebooked with the new owner.  They are of the mind that one of the big reasons guests chose to stay with us is because of us and the property is secondary. I would say that partially true but in our case our location is prime so that's a big factor as well. What they fail to consider is that in our area is just about all the short term rentals, hotel rooms and B&B's are completely booked in June, July and August so there will likely not be other accommodations available for these guests with other Airbnb hosts.  Oh well. We'll do what we can to help but the new owners willl need to get to work quickly to rebook the guests.

Thanks again and be sure to give a thumbs up if this was helpful.

Stan

[Stan-and-Jan0]

Hello fellow hosts.

Well...  this process has been interesting. We did sell the property and are now in the process of handing things off to the new owner and thier property manager. We close on June 1st!

I will be posting a blog of sorts here on the Host's Discussion Room with all the details of what we did, how we did it and how it worked. It's definitely a team effort between sellers, buyers and guests. Airbnb's role is still not clear but I will be making recommendations to them to make this process smoother for all involved.

Thanks for all your comments!

Stan

[Val4219]

@Stan-and-Jan0  @terry98   congrats on selling your property.

Considering selling my airbnb as well in order to buy a multifamily property.  I make great airbnb income here in Hollywood florida. 3x more then regular rental. I am ready to go bigger.

I am debating how to value my property.  Currently looking for a realtor with investment property experience. How did you go about choosing one? I also need a new accountant too. 

Lots to consider on the tax front. Kinda weary of that part.

Any guidance?