📝 Luxury STR Sales often resemble commercial transactions | Prep & Tips for Success

[AJ Wong]

Luxury STRs are sometimes easier said than closed..having just represented a buyer on one of the most prolific Luxury STRs on the Coast (and one of the most challenging and lengthy to close!) I thought it would be helpful to share some of the challenges investors can face and things to look for and prepare heading into a luxury STR purchase or sale.

First and Foremost: If you are buying or selling an existing STR - CALL PLANNING AND CONFIRM the transferability, eligibility or license-ability for the next owner. You would not believe that just yesterday - I called on a listing (owned by a OR RE BROKER) that is an active vacation rental but cannot continue to operate as such - even though the owner/broker thinks it can! Particularly if you are searching a vast geographical area - it is vital to understand zoning and compliant - ideally with the support of specialized real estate professional in this space.

Secondly: Have your (Oregon) Ducks in a row! Similar to commercial transactions - the majority of STR investors are seeking verified income and expenses. Be as transparent as possible and as organized as possible. All utility statements: electricity, water, sewer & garbage, INSURANCE, road snow plowing, septic maintenance agreements, lawn care, hot tub maintenance, internet, and supplies. On the buyer side - obtain all pertinent verifiable information as completely as possible and ensure that with written agreements you utilize an ‘investment addendum' or equivalent outlining specifically what the seller's are required to provide - and when!

Thirdly: Coordinating showings and tours around long-term tenants is annoying for everyone - coordinating them for a short term rental with a full calendar is extremely tedious and often frustrating for investors and buyers- particularly those visiting on their single trip of the year..my best advice is to try and block a few days for showings near the anticipated listings launch date and possibly even each or every other week it is on market. What can also be helpful is a link to the AirBNB or management calendar in the private remarks listing so that brokers can have an idea of the schedule - without unnecessary discussions. Another helpful resource can be personal photos, videos and as much content beyond the public listing that buyers would find helpful. Such as: walk throughs, floor plans, inventory and upgrade overviews, brochures and contacts like PM’s, cleaners, contractors and handyman. These resources can be helpful beyond the initial assessment - for during the inspection or contingency period when you need to determine feasibility of repairs, projects or management.

Lastly: Timing, strategy and decisiveness are CRITICAL. Particularly - post accelerated deprecation renewal - these assets are in incredibly high demand and likely to have investors of a similar profile considering the same property. In conjunction with the preparatory tips above, have a Pre-Qual letter and responsive lender relationship in place (the kind that responds promptly on Sunday night) and connect with a local insurance broker and of course - STR focused real estate professional to support an efficient search with the resources to visit and tour prime prospects as near to hitting the market as possible. On the sales side - the cleaner response you or your representative can deliver to a prospective buyer, the more efficient a sale is likely to occur.

Here are some other Luxury STR transaction considerations:

Pro Forma Drives Demand In commercial real estate, projected income often drives demand and even value..listings with strong reviews and turnkey management can command a premium above nearby residential comps. Luxury STR buyers aren't just comparing square footage or finishes—they're underwriting deals based on net operating income (NOI), occupancy rates, and cap rates. Like commercial buyers, they're asking: "What's the return on this asset?"

Due Diligence Goes Beyond the House Buyers want to see:

• STR permits & zoning compliance
• Booking history & revenue statements
• Guest reviews and property management records

That’s a very different due diligence process than your average residential buyer.

Luxury STRs are a business acquisition disguised as a residential home sale When you buy a high performing luxury STR, you're not just buying a home—you're acquiring an often branded, income-producing business. The structure, operations, and even the furnishings often come with the deal. Understanding the commercial mindset will give you an edge—whether you're running the numbers, negotiating price, or crafting your exit strategy.

Hope this is helpful :)