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Best way to sell a successful STR?
I have a short term rental that is very successful in St. Louis as it has 5 bedrooms and 5 baths. It has a good history, but I need to sell it. How would you recommend I market it to investors? It is best suited to be an STR rather than a home for a family so MLS doesn't seem that useful. Any suggestions would be appreciated.
You can still list on MLS and market it to investors. Find an investor-friendly agent (maybe here on BP) to work with and they'll have tips and strategies for the best way to market it.
Don't overthink it, list it on the MLS with a good agent. They can post the earnings history for other agents to share with their clients. Investors have agents that watch the MLS for good deals and those are the homes that go the fastest. If a primary home buyer wants to compete with investors, all the better.
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Real Estate Agent Nevada (#S.0193295) and CA (#02016625)
- Dustin Allen - REALTOR®
Get it in front of as many eyes as possible! The MLS is a big part of doing that and getting it listed on all the major sites people use to look for property. Find an agent that specializes in real estate investing. Don't look for the cheapest agent either find one that has a proven track record and they will be worth the money. It doesn't matter what you go under contract at...it matters what number you go to closing at. A good agent will get you to closing at the best possible number.
1. Know the prevailing market cap rate for the asset type (STR).
2. Know your numbers and (best case) be able to provide a pro forma and past numbers to prospective buyers
3. Price based on your numbers and the cap rate. Cap Rate = NOI / Purchase Price(market Value). Purchase Price (Market Value) = NOI / Cap Rate as a percent
An example would be a rental with NOI of 65k. Prevailing cap rate for STR in the area is 9%. 65k / .09 = $722,000. Then adjust to be competitive, eg., more real buyers above 725k, then price up a hair, or more actual buyers below, then advertise at that price. If that price is lower that FMV for regular buyers, don't worry about investors! It shouldn't be, though.
Then connect with someone or advertise in a place (like here) that has a high number of real buyers for that asset type (vacation rental/ short term rental). If you're in any groups for investors, market there. I would suggest searching for someone (a Realtor) on here that is in your area and knows what they are doing and has the buyers to market to. Be careful. Ask for their sales and make sure that they are actually selling and selling to investors in your asset class. I would let them put it on the MLS, too. I sell to people from all over the country and the world, and most sales are on the MLS.
Best case scenario: let the bidding begin!
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Real Estate Agent Florida (#SL3364820)
- 727-288-7325
- https://danmacrealtor.com/
- [email protected]
Hey @Kirk Watkins!
@Kevin Luttrell said it perfectly! Even if you list it on the MLS investors will find it. Get an agent that invests in the market and pick their brain on what they think would be best to do in this situation.
If you have any more questions don't hesitate to reach out!
Cheers,
Josh
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Real Estate Agent Pennsylvania (#RS364365 )
- 484-986-5012
- [email protected]
Quote from @Kirk Watkins:
I have a short term rental that is very successful in St. Louis as it has 5 bedrooms and 5 baths. It has a good history, but I need to sell it. How would you recommend I market it to investors? It is best suited to be an STR rather than a home for a family so MLS doesn't seem that useful. Any suggestions would be appreciated.
@Kirk Watkins can you send me details about your property? I'm from Southern California but have an office in Gravois Park. I'm tired of paying for apartments when I fly into town. I'm looking for a property similar to yours.
Thanks
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- Austin, TX
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Quote from @Kirk Watkins:
I have a short term rental that is very successful in St. Louis as it has 5 bedrooms and 5 baths. It has a good history, but I need to sell it. How would you recommend I market it to investors? It is best suited to be an STR rather than a home for a family so MLS doesn't seem that useful. Any suggestions would be appreciated.
I think the suggestions here are good but don't overlook posting on some big STR facebook groups, there are a couple that are dedicated to people looking to buy STRs, especially turnkey cash flowing ones.
Quote from @Kirk Watkins:
I have a short term rental that is very successful in St. Louis as it has 5 bedrooms and 5 baths. It has a good history, but I need to sell it. How would you recommend I market it to investors? It is best suited to be an STR rather than a home for a family so MLS doesn't seem that useful. Any suggestions would be appreciated.
You have all the financials and use those to your advantage. My experience agents that have a listing of a STR either do not have them right away, or take a long time to get those to prospective buyers. In our MLS, we have a spot called supplementals and I would attach them there so the buyer's agent can provide them to the buyer ASAP. Also, make sure your listing on Airbnb is doing well and you have been doing well with the performance which will get you way more money. I have noticed that some people do not run it well, their numbers are half what they could be then it just hurts their sale of the home/STR in price and DOM (days on market).
The second way to be a good STR investor that sells it for a profit is network with those STR owners, we sold one on an off market transaction since we had a relationship with a lot of STR owners and some investors that were looking to get into that specific area. That being said network with those agents in that area that have been selling a lot of STRs, off market deals, and selling for/to investors.
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Real Estate Agent Ca (#01968986)
- The McKernan Group
There are some social media groups that investors from all over the nation follow. I’ve watched properties posted there create a feeding frenzy because it’s a targeted audience. There are others, but I belong to Airbnb homes for sale—79k members. Just be sure you know your market well enough to set your price on your own. You could be penny wise and a pound foolish if you save an agent’s commission only to price the property too low and lose substantially more.