🏁 Why AirBNB For Sale Websites don't work and what STR Investors should do instead

[AJ Wong]

For many STR investors, starting an AirBnB For Sale investment search from scratch can be frustrating complete with wasted hope, time, effort and evaluations.

The most exhausting part of investing in a worthwhile STR or AirBnB is the prospecting, qualifying and evaluation of a subject property. The initial challenge when investing in STR's is usually whether a property can retain or obtain a license or permit. Often, even actively licensed and operating vacation rentals might not be immediately eligible for a new permit (for the new owner) so a clear understanding of the permitting or license process is critical for investors.

The VAST majority of STR and AirBNB focused prospecting sites such as; AirDNA, Rabbu, Awning and Pacaso fail to actually determine whether a property is eligible for vacation rental usage or permitting. What is the point of providing great 'potential ROI' if the property can never get a permit? These websites do an excellent job of highlighting active listings but if the property cannot be legally operated, it isn't a genuine STR prospect.

Additionally, the estimates on most of the sites (with the exception of AirDNA) are generally overstated. AirDNA is in fact accurate enough that many STR focused lenders allow a formal estimate to be utilized when underwriting rental income for mortgages.

During the past several years, we have assisted approaching two dozen STR investors acquire and launch hospitality businesses along the Oregon Coast. The secret sauce is really doing the dirty work. In my market I'm familiar with nearly every STR eligible property, partially by repetition and partially by contacting the relevant planning authority and confirming the process and permitting procedure on a HOT new listing. When in doubt on whether a property can qualify, call or email the proper jurisdictional contact.

In most markets, HOT STR's For Sale are still one of the most desirable property types and asset classes. Chances are if an investor is looking in that area or to utilize a property for that purpose so are others. I don't have any formal data but at least on the OR Coast most active or eligible vacation rentals for sale typically sell quicker than their unlicensable counterpart.

Here are my top tips for STR investors searching for an AirBNB For Sale:

- Clear and Concise wish list: Budget, region, particulars, timeline. The more focused and intense the investors' search, the more likely they'll be aware of prospects and create opportunities. Additionally, no research or due diligence is wasted, what you learn from one prospective property can be excellent reference for the next. 

- Work with professionals: Owning and operating an STR is owning and operating a hospitality business. Investors will need a team familiar with the area and process. A STR specialized Realtor will be invaluable (if you can find one), otherwise a Real Estate Pro that can rapidly coordinate showings and offers is suggested. A local PM can help with the evaluation process and often assist with the post closing mechanics of securing the permit.

- Furniture and Design considerations: A non-operating STR or property that is unfurnished will need to be transformed into a fully functional rental complete with knives and forks. Be sure to budget for furniture and furnishings as well as the time or team to help launch.

- Patience & Persistence: The reason that there are websites and businesses devoted to STR investment property searches is because they are lucrative and difficult to acquire. The proportion of active listings to eligible AirBnB rentals for sale is low, so at least mathematically the longer the search, the greater chance of catching a good one. With that said, when the right property presents itself, be ready to ACT. Have financing in line, and make the effort to tour the property ASAP. Timing can be the most critical ingredient to successful sales.

- North Star: My high level advice is to invest in a property and place that the investors themselves personally enjoy. The guests utilizing the space are likely looking for the same amenities and qualities that owners are. Creating a home away from home for others to share is the guiding investment light, theme and strategy. 

For those seeking an Oregon or Oregon Coast STR we keep an up to date HOT Sheet of active and eligible STR's for sale here.