Rental Property Investor · Littleton, CO · Member since 2018 · 14 posts · 13 votes
I have a property that I'm struggling to price for sale. Currently it has a duplex with long-term renters, and an above-garage dwelling unit that was converted from long-term rental into a successfully operating AirBnB. Pricing this property by square foot negates the entire income of the AirBnB, and converting it to a long-term would reduce the income and further reduce its value.
My concern is that listing it on the MLS with an 'accurate' / higher valuation (based somewhat on CAP rate for the AirBnB) would not appraise well when compared to other triplexes that are all long-term rentals in the area.
Does anyone have experience getting accurate valuations for these types of mixed properties?
Contractor · Nashville, TN · Member since 2014 · 1k+ posts · 1k+ votes
3y
You are correct it would appraise based on comps not airbnb income. In Nashville both these values are the same because people keep pushing the sale prices up because they want the income, and then the next buyer has a comp to use, and so on.
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
3y
@Ryan Taylor, who runs your Airbnb (you or a management company)? How long has it been up?
Personally, I (out of frustration) laugh when I see people trying to value their properties based on Airbnb income. Airbnb is a cottage industry (that in many areas is certainly on the decline).
But at the end of the day, a duplex or triplex is almost always going to be based on the comps, not a GRM or any type of income approach. So, your value will be what other duplexes are selling for. And it will be up to the buyer if they want to work in the hotel industry, sorry, I mean be an Airbnb host.
I have a property that I'm struggling to price for sale. Currently it has a duplex with long-term renters, and an above-garage dwelling unit that was converted from long-term rental into a successfully operating AirBnB. Pricing this property by square foot negates the entire income of the AirBnB, and converting it to a long-term would reduce the income and further reduce its value.
My concern is that listing it on the MLS with an 'accurate' / higher valuation (based somewhat on CAP rate for the AirBnB) would not appraise well when compared to other triplexes that are all long-term rentals in the area.
Does anyone have experience getting accurate valuations for these types of mixed properties?
Appraisers haven't figured out how to include airbnb income into their rental comps valuations for properties. Comps are really your best friend in this case, though they may be harder to find for this specific property type.
I have a property that I'm struggling to price for sale. Currently it has a duplex with long-term renters, and an above-garage dwelling unit that was converted from long-term rental into a successfully operating AirBnB. Pricing this property by square foot negates the entire income of the AirBnB, and converting it to a long-term would reduce the income and further reduce its value.
My concern is that listing it on the MLS with an 'accurate' / higher valuation (based somewhat on CAP rate for the AirBnB) would not appraise well when compared to other triplexes that are all long-term rentals in the area.
Does anyone have experience getting accurate valuations for these types of mixed properties?
As mentioned earlier, this would most likely be comp'd with similar like properties nearby. Unfortunately, we have to valuate based off of how an appraiser would valuate on the refinance or selling side of our business. Depending on the state, some will do three methods of valuation: comps, operating income, and building new, to come up with a valuation. However, the later two are generally used as references in case their are variables that make comps difficult (irregular lot sizes, other buildings on the property, nonconforming, etc).
I'd be really curious about this property if it is in Shreveport! I used to have a few rentals out there, it's a very interesting market and drastically different from block to block. I still have great connections out there, if you need connections, I'd be more than happy to help.
Investor · San Diego, CA · Member since 2021 · 20 posts · 12 votes
3y
Hey Ryan!
I know this was over a month ago but I own an interesting property in the area just like yours and if you want to DM me I'd be happy to talk numbers with you. My wife and I are are looking into acquiring more STR's in the area so let me know!