Future of STR property/business sales

[Jules Aton]

The Realtors among us might be the most informed but I'd like everyone's thoughts on whether as the STR model continues to evolve there will be a way to capitalize on the value of the business portion. While I get that mortgages cover the real property I think there should be a way to get paid for selling a profitable business with an established track record. I've seen retail businesses that are sold with and without property included so why not STR? While I get it isn't brain surgery to start a STR I bet there are folks who would be interested in a turn key situation.

[Collin Hays]

A short term rental is in fact a business. It is a service business, but includes real property. These "businesses" are being marketed daily on MLS to potential buyers. That is why you will often see the rental income history included in the listing; the rental income is a part of the asset.

I own a number of service business locations where I lease. The value of the business is strictly tied to earnings, not whatever fixtures or supplier that the business has. Service businesses can be valued in many ways, but it comes down to what a buyer is willing to pay for the yield. And a service business also means that you are buying yourself a job, at least to some extent.  

Short Term Rentals are a service business. You’re buying yourself a job, at least to some extent. And since you are going to be investing in real property as well, the premium is going to be much higher than what one would pay just for a house, and much higher than one would pay for a service business with no hard assets attached.

With a short term rental, you are buying BOTH, and an educated investor is going to know this full well. 

Not sure if I clarified anything or muddied the soup 🍲 further.