All Forum Posts by: Stefhan Malherbe

They all had the same answer. It is worth what comps say it is worth. They do not take into consideration the revenue from the STR business as part of the selling price.

So if comps say the duplex is worth 500k, then it is worth 500k. That is what they will lend on.

The bottom line is that past performance is no indication of future returns.

Someone takes over your STR, they will be starting from scratch. AirBNB and VRBO don't transfer accounts and reviews. They will most likely have to update it a bit.

Essentially the lenders will be taking a risk on the property if they overvalue it.

Buyers could look at a DSCR loan which does take into account the revenue from the rent but it doesn't count towards the value of the property.

Now, buyers could look at a business loan of some kind but I am not sure they would qualify if it is only one property and even then, the value is mostly in the property and not the possible revenue.

Hi Michael, thank you for the detailed response.

0 Votes

Fort Lauderdale, Florida

Quote from @John Underwood:

It will only appraise based on comps of similar residential properties. It doesn't matter what your rental income is.

Anyone could buy in your neighborhood and make a STR.

I thought that might be the case. Thanks John

0 Votes

Fort Lauderdale, Florida

Hello BP Community,

I am looking for advice on how to sell my STR property. It is a side by side duplex, both two bed two bath units. One unit has a pool and hot tub. The other unit a hot tub.

The unit with the pool and hot tub has been operating as a STR for two years. The unit with the hot tub for a year and half.

I have three listings, 1. unit with a pool and hot tub, 2. unit with a hot tub, 3. both units together as a 12 sleeper.

Gross monthly income (after booking channel fees) for the first unit over a 7 month period was $7309.

Gross monthly income for both units over a 14 month period is $11,297 (after booking channel fees)

As a long term rental the combined rent would be in the region of $5500.

Is it possible to sell the property based on the income generated by the STR business or would the value always be based on bricks and mortar comps?

I assume if the property is bought with a mortgage it will always be valued based on comps.

What is the formula to calculate what the business is worth based on gross and net STR income?

Thank you for any feedback

0 Votes

Fort Lauderdale, Florida

Quote from @Ryan Rochefort:

Hey there, I'm a Palm Beach Gardens local and have a number of properties in this area, I have some recommendations for you! You can call or text me at 561-427-8794 😁

Hello Ryan, Thanks for responding. I will reach out to you this week.

Thanks

0 Votes

Fort Lauderdale, Florida

Hello BP community,

I want to switch to a different property management company to manage my duplex in Palm Beach Gardens.

I’ve been with the same management company for 7 years but it is time to move on.

I appreciate any feedback or recommendations.

Thank you

0 Votes

Fort Lauderdale, Florida

Hello BP community,

I am looking to switch to another property management company to manage my duplex in Palm Beach Gardens.

I’ve been with the same management company for 7 years but it’s time to move on.

I appreciate any feedback or recommendations.

Thank you

0 Votes

Fort Lauderdale, Florida

Hello BP community,

I have a lease due for renewal in two months. The current tenant signed a two year lease and I did not raise rent during this period.
I will raise rent to market rate once the current lease expires.

I am basing what I think market rate is on research from sites like Rentometer and apartments.com.

Are these sites accurate enough or are there any other sites I could use as well?

I appreciate any feedback.

Thank you

1 Vote

Fort Lauderdale, Florida