STR - Transferring the business to new owner

Short-Term & Vacation Rental Discussions
6yFollow

STR - Transferring the business to new owner

Levi Koskan
Austin, TX · Member since 2016 · 23 posts · 11 votes

Hi BP community,

My wife and I are excited to be in talks with a seller that has a duplex with which he has been successfully AirBnBing. Our plan is to live in unit B and continue the STR strategy for unit A. The unit and the seller are crushing the occupancy rates (even with covid) and have 5 star reviews. House hack situation.


From a business perspective, I view this as buying an operating business. The problem is that the seller nor us, have a great idea on how to transition the business and all of its assets (property/owner ratings, future guest bookings, ect..) to the new owners. I'm looking for some sage advice on those who have sold a STR property in the past that might be able to explain some of the nuances.

The seller is very experienced in running the STR business so I'm also considering writing into the contract terms for ongoing consulting and access for up to 90 days after close (or something like that) to make sure the business keeps producing while we learn the business. Curious if anyone has seen anything like that and could provide a template?

Thanks for all the help!

1Reply
47 views

Most Popular Reply

Bradley Chapman
Real Estate Agent · Charleston, SC · Member since 2018 · 37 posts · 29 votes
6y

Levi,

I have first hand experience in buying and selling operating STR's, and while you're unable to transfer an Airbnb listing there are absolutely ways to take advantage of the situation without "starting over." Partner and I recently purchased a duplex where both units were being run as STR's (very successfully). From the date of closing, the seller had 20K in bookings that we were obviously interested in maintaining, so we negotiated in the contract that seller would maintain property management responsibilities for bookings 60 days after closing to maintain continuity with guests already on his calendar. In return, seller received 10% of the booking fees. This also allowed us to have a 60 day ramp up period with our newly created Airbnb listings so there were no wasted months from the time we closed.

Lots of different ways to do these types of deals, but if generating revenue from the day you acquire the property is high priority, I would suggest a strategy that includes working with the seller for a period of time after closing.

Best of luck!

4Reply
See this reply in the discussion

6 Replies

Jump to latestLatest
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    6y

    You will need to create a new Airbnb account and start over. Airbnb does not allow accounts to be sold/transferred.

    Once you close on property see if owner will cancel future bookings and give them link to your listing.

    2Reply
  • Avery CarlBusiness Member
    Real Estate Agent · USA · Member since 2016 · 909 posts · 1k+ votes
    6y

    The short answer is: you can't. My team sells several hundred short term rentals a year and this comes up a lot. Airbnb can't transfer listings and reviews between owners. The cleanest option is to go ahead and create your listings and have the previous owners future guests rebook with you for their dates.

    Podcast Guest on Show How to Get More Airbnb Bookings This Spring and Summer Break
    3Reply
  • Jon Crosby
    Investor · Roseville, CA · Member since 2016 · 893 posts · 1k+ votes
    6y

    @Levi Koskan  Congrats on the find, sounds like an exciting opportunity! 

    You already got the bad news related to the collateral of the existing listings, but as for furnishings you can simply add that as an addendum to your real estate purchase agreement.  I doubt an owner would sign up for 90-day consulting (unless he's getting paid for it) but you really don't need that anyway...he can probably pass on most of his knowledge in a just a few days. 

    I would start with figuring out how any permitting needs to be transferred first (transient occupancy or business permit if applicable).  Usually you just have to sign up for fresh permits but you will want to make sure you know how all that should work.    

    There is no reason you can't continue with the existing owner's business model however and get your ratings and reviews just as high (or higher) pretty quickly.  Generally the booking sites will give your 'new' listing priority in search results as you get started so you can get some reviews under your belt and start getting data into their algorithm.  It's critical that your initial guests under your new listings have a 5-star experience and make sure they write those 5-star reviews. 

    A duplex house-hack is a good find to get started for sure (so long as you don't mind living next to all those guests coming in and out). I would suggest you make sure the property cash flows as a regular rental as well to be safe and I would make sure that you are getting reliable data on the owner's existing rental records. High occupancy is easy if you are charging next to nothing and letting anybody and everybody come thru, the trick with STR's is getting that good combination of occupancy rate to maximum possible ADR (average date rate) so that you not only maximize your revenue but get quality guests coming thru your property.

    Best of luck to you! 

    1Reply
  • Ryan Foster
    Rental Property Investor · Chandler, AZ · Member since 2019 · 42 posts · 44 votes
    6y

    Hi Levi -

    If using AirBNB, you will need to create a new account, add the property to your account, and rebook any existing bookings.  Unfortunately, it sort of a rip the bandaid off approach when moving properties to new accounts.  

    0Reply
  • Levi Koskan
    OP
    Austin, TX · Member since 2016 · 23 posts · 11 votes
    6y

    Great info. 

    Thanks @Jon Crosby for the additional points.

    Bummer the STR platform doesn't make it easy to transfer but it sounds like we at least have action steps identified to create the transition plan. Appreciate the quick replies by the community.

    Cheers!

    0Reply
  • Bradley Chapman
    Real Estate Agent · Charleston, SC · Member since 2018 · 37 posts · 29 votes
    6y

    Levi,

    I have first hand experience in buying and selling operating STR's, and while you're unable to transfer an Airbnb listing there are absolutely ways to take advantage of the situation without "starting over." Partner and I recently purchased a duplex where both units were being run as STR's (very successfully). From the date of closing, the seller had 20K in bookings that we were obviously interested in maintaining, so we negotiated in the contract that seller would maintain property management responsibilities for bookings 60 days after closing to maintain continuity with guests already on his calendar. In return, seller received 10% of the booking fees. This also allowed us to have a 60 day ramp up period with our newly created Airbnb listings so there were no wasted months from the time we closed.

    Lots of different ways to do these types of deals, but if generating revenue from the day you acquire the property is high priority, I would suggest a strategy that includes working with the seller for a period of time after closing.

    Best of luck!

    4Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free