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Updated over 1 year ago,
Good cap rate for selling short term rentals?
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?