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]

Hello Airbnb Hosts - It's been a litte over a year since we sold our property in Bend, OR. Even though it was compicated and a lot of work,  It all worked out just fine for us, the buyer and the guests. Now that we have been through that experience we will be able to navigate much easier through the next one.

One final note: Beware of your state and federal tax liability. There will be capital gains taxes on any profit when you sell your property if you have rented any part of it. You will also need to recapture any depreciation you have taken and when you do that, any recaptured depreciation is considered income.

Cheers!

Stan

[Diedrich0]

Thank you Stan & Jen!

You mentioned you have a tip sheet for Airbnb hosts selling their home. I have a triplex in Savannah, Georgia I'm selling. You two would make great consultants. If you are, please let me know where I can find you. 

Diedrich 

[Stan-and-Jan0]

Hi Diedrich - I have considered offering up some consulting expertise regarding hosting best practices and what to be aware of when selling your property. Selling a multifamily property, especially if you have all 3 units rented as short-term rentals presents some challenges for sure.  Here are some tips to consider.

1. Valuation and Marketing: You need to figure out what your property is worth.  There are a few different ways to land on a value. Many investors will look at the CAP Rate. That is the purchase price compared to the net income (income, minus expenses (before taxes).  You can get some help on that if you find an experienced  commercial or mulitfamily agent.  These agants will have a network of qualified investors they can present the property to. There are many potential buyers with 1031 exchange cash so that's a good potential market. Relying on an MLS lsiting is not a great strategy like it is for a single family home as you really need to vet both the agents presenting the property and the potential buyers so you're not wasting a lot of time.

There are other issues you'll need to address. With most platforms like Airbnb in particular, they do not allow the transeral of listings or reservations to new owners. You'll need to look at the process of moving any reservations over to the buyer if you are marketing the property as a "turn-key" short term rental. That definitely will increse the value to a potential buyer but it creates a fair amount of work and there are no gaurantees all reservations will actually get transferred to the buyer. 

You can contact me at  **[E-mail address hidden due to safety reasons - Community Center Guidelines]

but if Airbnb blocks that email you can do a search for me on Google. My new property is in Boise, ID and may be found by searching for "State Street Suites" or just private message me through this platform.

Cheers,

Stan

[Diedrich0]

Fantastic and generous response Stan, thank you! 

I decided not to sell but knowing this will help me make that decision when/if selling arises and I’ll contact you. 

[Stan-and-Jan0]

Glad it helped. One other thing. Take a good loo at your tax liability. Capital gains in particular. We opted not to go with a 1031 Exchange type transaction so we paid Uncle Sam and the State of Oregon a sizable sum.  But without the capital we would not have been able to do what we wanted to do. Many people go with a 1031 Exchange to avoid paying high state and federal Capital Gains taxes.  Cheers - Stan

[Trish159 · Accepted solution]

Hi Everyone,

This has been a good (enlightening) thread. I came here today because I just decided this morning to sell my house and thought Airbnb would have a place for interested buyers and sellers to find each other. To me, that would only make sense. But alas...

Thanks, Stan and Jan for negotiating your way through this thicket, coming out the other end, and sharing your insights with us all. I hope Airbnb gets some of this info out where everyone can find it. 

Trish

[Stan-and-Jan0]

Hi Trish - Thanks for the comments. Good to see someone getting some use out of our trailblazing. If you rent out all or part of your home (legally) you can and should factor in the value of the rental income to the value of the home. That is if the buyer wants to continue renting as you have.

Talk to your tax consultant as well about any (fed or state) tax liability you might have upon the sale. Once you rent even just a room out and claim the income your property is considered an income property subject to capital gains taxes.

We opted to pay the taxes even though it was a big chunck of money so we could use our profits to buy and renovate another property rather than going through a 1031 Exchange process. 

Anyway good luck to you and I'm glad you got some insight into the process.

Cheers,

Stan

P.S. Please give a Thumbs Up if you found this to be helpful. 

[Juneffer0]

Hello Stan, 

Thanks for directing me to this thread.  Well I just got off with Airbnb and they don’t want to help.  They are saying they cannot work around their policy of cancellation penalty.  I have a strict policy and my guests can actually get full refund if they cancel a month before arrival, but Airbnb support is saying they will charge the guests service fees if they cancel.  If I cancel I get charged fee of $50-100 and get dinged on cancellation rate.  
I have a question on “Scenario #2: If the new buyer does not want to honor the reservations that have been made for your property you need to contact Airbnb and let them know you are sellin, or have sold your property. Airbnb will then cancel the reservations so you do not get penalized and assist the guests in find new accommodations.” Of the 2 Airbnb support team I’ve spoken to, no one was willing to cancel or help me get new accommodations for the guests.  In fact, both threatened to penalized me and adviced I should not let guests cancel.  Why is it ok for Airbnb to cancel guests for full refund 3x on me due to excuse of Covid as extenuating circumstances and two of this was on same day as check in.  And not help me try to cancel a month before a guest’s arrival? Should I also wait on the day of guests check in and tell them I can’t host because I have contracted Covid? I just really feel so disappointed with Airbnb’s lack of support right now.  I feel so defeated.  One customer rep even so much insinuated that i must be making a ton of money selling my home in this market so I should not have trouble paying the fees! So ridiculous.  

[Sarah977]

@Juneffer0  I see you have 2 listings and assume you are just selling one and continuing to host. So forget trying to deal with Airbnb on this- as far as I'm aware, what you are being told by them is how they usually operate- they won't facilitate rebooking of guests and insist on applying penalties.

So how about offering the guests a full refund including their service fees if they cancel themselves, and avoid all the frustration and penalties from Airbnb?

The thing is, if you are selling, you really shouldn't have taken bookings more than a few days out. It really isn't fair to guests to hedge your bets by continuing to take bookings because you don't know how long it will take to get a buyer or you don't know how long a sale will take to close, nor might all guests want their booking transfered to a new owner, when they booked in part on your reviews, so I can sort of understand Airbnb's stance on this.

[Stan-and-Jan0]

Hello Juneffer0 - In scenario #2 I think that's what we ended up doing. The difference was that the buyer had his listing ready to go so that upon Airbnb cancelling they could direct the guests to the new owner for the same property. It actually worked out well in our situation.

I contacted the guests to let them know what was coming and let them know if they wanted to stay on the property they would need to contact the new owners through the new listing and let the buyers  know they wanted to keep the reservations. SO basically Airbnb cancelled the resevations and them helped the guest rebook at the same property with the new owners.