Real Estate Agents fail Airbnb sellers
According to Airbnb data there are 2.9 million hosts on Airbnb worldwide in 2020. 14,000 new hosts are joining the platform each month in 2020 and some will fail without proper property management that competently handle their short term rental. So, the owners go to sell the property with a real estate friend and way under sell their property unknowingly. Many RE Agents do not know to use the sellers profit & loss, correct appraiser, etc to sell this property as a business to provide their seller with optimal ROI. I experienced this when selling one of my properties in another state until I found the right RE, has anyone else?
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So much wrong here I don't know where to start. RE agents are not permitted to select appraisers. The buyer's bank works with an independent appraisal agency, who then facilitates the assignment of an appraiser. The process is deliberately and specifically independent so as to avoid the manipulation of appraisal values.
Most STRs are single family residences, which are valued as such and appraised as such with a typical conventional loan; they are not, fundamentally, businesses, and a buyer's lender is not going to treat them as such.
There are certain markets where the overnight rental market is strong enough that an appraiser MAY consider income as a consideration in value, but that would also depend on the loan the buyer is obtaining.
Unless the seller SPECIFICALLY wants to sell as a business, limit their buyer pool to buyers who want to buy a business *and are obtaining financing that will value it as a business* then this is all nonsense. And if the seller is selling because they failed to operate a good STR, why would they want to market it as a desirable business in the first place and cut themselves off from the vast majority of buyers who are not looking for an STR?