What are Airbnb buyers looking for? The five main themes that Airbnb buyers love to see.

Forget about repainting. Follow our golden rule.

Chances are, if you’ve thought about selling a house or have sold a house before, you’ve talked to a real estate agent about what buyers are looking for. They likely mentioned things like…

  • Location.
  • Price.
  • School district.
  • Neutral walls & finishings.

While the above points can score you some additional cash or shorten time-on-market for traditional residential sales, Airbnb buyers are a bit unique. Given they are buying into a business, not just a traditional residential home, they seem to be interested in more than just school districts and wall colors. Luckily, here at Rabbu, we’ve seen both sides of the process. We, ourselves, have been buyers and sellers of Airbnbs — both on behalf of our clients like you, and also, personally. We’ve reflected on our experience and rounded up our list of what buyers think makes a good Airbnb home purchase. Does your home fit the bill?

The golden rule: Location. Property. Financials. Regulation. Comparables.

Airbnb buyers take into account many different factors when looking to purchase a home (case in point: the lengthy list below), but the most important thing to remember is that all of these factors boil down to five main themes: location, property, financials, regulation, and comparables.

Location.

This doesn’t differ too much from a traditional residential real estate sale. Airbnb buyers still need the property’s location to be in a desirable area, but they’re also interested in a few unique factors that provide value to their guests. It’s difficult to have a home that checks all of the boxes, but if the Airbnb home you are selling really shines in a few of these areas, your buyer will be thankful.

  • Neighborhood vibe. What’s your neighborhood look like? Would you want to visit it if you didn’t live there? Even if the neighborhood itself isn’t a destination, what is it close to? Airbnb buyers want to know their guests will be near attractions and amenities that can enhance their stay, outside of the house themselves. Are there highly rated restaurants, breweries, or coffee shops that foodies can enjoy while there for the weekend? Is there a grocery store or fitness center nearby for the work-from-anywhere, long-term guest? Is there a playground and ice cream shop within walking distance for families visiting on their annual vacation? What about nearby nature or mountains for outdoor enthusiasts? A good Airbnb appeals to a specific niche or two, and if your Airbnb for sale has nearby amenities to offer that can appeal to guests, it makes it a great purchase for short-term rental buyers.
  • Proximity to airport. How accessible is your Airbnb? Sure, short-term rentals in rural Idaho may perform well — there are always outliers, but traditionally, Airbnb homes that are close to airports yield better results for hosts.

  • Bikeability, walkability, and transit-ability. Depending on the market your short-term rental is in, guests staying may or may not have a rental car. Is your home in a location to allows non-drivers to thrive? A high biking and walking score for your neighborhood, or an abundance of public transit, are key things Airbnb buyers are interested in. Curious about what your biking and walking score is? Check it out here

  • Property. Though short-term rental buyers may not be buying the property for traditional residential reasons, the property itself is still a key piece of the puzzle. Is it set up to be a successful Airbnb? Does it have unique features that make it stand-out? Questions like these are things Airbnb buyers ask themselves when evaluating short-term rental homes on the market.
  • Bed, bath, and layout. How many people can your home accommodate, and what is the layout? There isn’t necessarily a right answer here as different short-term rental buyers and Airbnb hosts have different goals and preferences, but generally speaking, we advise our buyers and owners to avoid listing homes on Airbnb that are conducive to guests having parties or becoming unruly.

  • Unique amenities. Is there a stellar mountain view from the hot tub on the patio? Is there a wood-fired pizza oven in the kitchen? There’s a real wood fireplace, and a pool table in the basement? Unique amenities like this are music to potential buyers’ ears. You say “pool and ocean view”, they see “$$$”

  • General property feel. Buyers of short-term rentals don’t always have to have the same interior design taste as the properties that they buy, but they do need to feel confident that the look and feel of the property will attract guests. Are the stylistic decisions within your home purposeful, and do they add to the experience? Airbnb buyers are keen on walking into a turn-key business, so the least amount of renovations they feel they have to make, the better.

Financials

While listing price is important, Airbnb buyers are a business savvy group. Do you have impressive historical performance, or is your occupancy rate top-notch? Airbnb buyers care.

  • Listing price. Before we hop into historical financials, buyers are interested in what they’re going to be paying. This does differ a bit from a traditional sale — when deciding what to list your short-term rental for, it’s important to remember that your business is worth both the price of the residential home + any related business assets. Will your buyer be inheriting a booked up Airbnb calendar? Do you have gorgeous West Elm furnishings you’ll be leaving with them? Are your carefully curated vendor relationships worth a monetary amount? If the answer to these, or other similar questions, is yes, then make sure to reflect that in the listing price.
  • Historical financial figures. Airbnb buyers love to see numbers. Expect that if your home has a high historical gross revenue or average daily rate, Airbnb buyers will be pleased.
  • Cap rate. While cap rates can vary wildly from market to market and city to city, a cap rate of 8-12% or higher is bound to pique some interest from short-term rental buyers.
  • Historical occupancy rate. Just like cap rates, occupancy rates can also drastically vary market by market. Some markets experience high seasonality, while others experience consistent occupancy throughout the year. Researching average occupancy rates for your area to aid comparison is key (we recommend doing this through our Insights tool!), but generally speaking, occupancy rates over 70-75% are exceptional.

Regulation

While we’ve been seeing cities, neighborhoods, and HOAs enacting regulations against short-term rentals, it’s important to remember they’re not all deal-breakers. There is more for Airbnb buyers to consider than the mere presence of a regulation, and savvy buyers will know the ins and outs.

  • Short-term rental regulations. Is your property subject to short-term rental regulations? With the onset of many of these regulations, it could be. As a seller, don’t panic — if you’ve been operating an Airbnb out of this home, you know good and well that there are ways to work around this. Many regulations require a minimum night stay, a boots-on-the-ground property manager, or other minor nuances. A savvy property manager (like us!) can help your new buyer navigate these waters and run a successful Airbnb.
  • Occupancy taxes, licensing fees, and other expenses or requirements: Beyond regulations, certain markets or jurisdictions put up other hurdles for short-term rentals. Between licensing requirements, licensing fees, and occupancy taxes that may detract from guest bookings, owning a short-term rental can get pricey for some. If your Airbnb home is in a market with minor regulatory hurdles, you and your home are set up for success on the buyers’ market.

Comparables

It seems like everyone these days wants to operate an Airbnb. Because of that, some markets may become saturated. That doesn’t mean unique and well-run properties won’t thrive, though. What do comparable Airbnbs in your area look like, and how do they perform? Airbnb buyers will be keen to know.

  • Nearby competition. Is there little nearby competition, but a high demand for places to stay? Is there healthy competition, but your property historically is performing higher than the rest? These are the types of questions potential buyers will be curious about, and having educated answers like the ones we give over at our tool, Insights, will be key to communicate to buyers and capture their interest.

 

After reading our golden rules, is your Airbnb a stellar pick to sell to another short-term rental buyer? Chances are, if you’ve been operating a successful Airbnb business out of it thus far…it probably is. 

Here at Rabbu, we believe in keeping passive income easy. Want us to connect you with our buyer’s network of 50,000 and growing engaged Airbnb buyers so that we can make your life, and sale, easier? You got it. Leave us your details below.

 

 

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