Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Buying & Selling Real Estate
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 1 year ago,

User Stats

49
Posts
18
Votes
David McCracken
  • Rental Property Investor
  • Rochester Hills, MI
18
Votes |
49
Posts

Good cap rate for selling short term rentals?

David McCracken
  • Rental Property Investor
  • Rochester Hills, MI
Posted

I have a small portfolio of six rental units. Five of them are run as furnished short-term rentals, and one is a long-term rental. I'm interested in listing all six for sale. I'd like to know if you think this is an attractive deal. Details below.

Operationally, the business is run tight. It's almost 100% automated. As soon as we get a new booking, our software notifies our cleaner so that he can put it on his schedule. We have automated messaging, restocking, etc. It works well. We've managed to maintain a 4.8+ star rating on our listings.

The location is outside of the city of Detroit. Great access to highways and central to the metropolitan area.

I wanted to provide a picture that shows some of our work, so that it may help illustrate the level of quality. Picture is here.

The Net Operating Income of the business is $140,685.00. I feel confident with that number after going through our financial data. Next, I want to settle on a cap rate. Online I see that most businesses for sale in my area are in the 7.5% cap range or they don't include financials at all. A 9% cap rate puts the listing price at $1,563,166.00. Would this be considered an attractive cap rate? Too high, too low? 

Loading replies...