Thinking of selling your vacation rental property? The decision of whether or not to sell an asset like this is always a tough one – after all, it makes you money. But running any kind of business is never a walk in the park, and for most, a vacation rental property is a side hustle. The stress and administrative side isn’t always worth the money.
But how do you decide if selling is really the right move for you? And, if it is, what should you know before moving forward? Read on to find out.
If you’ve already decided that you’re going to sell your vacation rental property as soon as possible, skip this section, but if you’re on the fence stick with us. The decision isn’t an easy one, but here are a few signs that now is the right time to sell:
- It causes you stress, even when things are running relatively smoothly
- You’ve had one too many difficult renters
- You’re sick of managing it yourself and don’t want to pay someone else to do it for you
- It’s no longer profitable enough to be worth your time and effort
- Maintenance is starting to get expensive
- Dealing with management companies is more trouble than it’s worth, and you don’t want to do it yourself
If any or all of the above is true, it’s likely your time with your vacation rental property has run its course.
In terms of market timing, you need to consider if market timing really matters to you if you’re finding the property difficult or stressful to manage. Experts may say that house prices will be higher in 6 months or a year, but if your vacation rental is causing you daily stress, is the extra money going to be worth it? Often not.
If you decide you do want to wait to see if house prices will improve, make sure you make a plan for when you’ll sell and how you’ll make the property more manageable until then.
Check your cancellation policy or that of any sites you use to get bookings so you know how much time you need to give any guests before cancelling. There may be penalties for cancelling with short notice, so make sure you’re aware and start closing bookings or if you know you’re going to need to show the property.
This one is obvious, but if you’re sick of your rental property and it’s generally in rentable condition, you may be tempted just to call a realtor and get them to handle the whole thing. While this is an option to some extent, it’s best to do an assessment and consider what’s worth fixing and what’s not.
You can’t rely on short-term renters to tell you that one of the hot faucets only runs cold, or that a bathroom lock doesn’t work. Make a list of what needs doing and decide when you can do the work (or hire someone to do it all for you).
If you’ve discovered there’s something wrong with the property that will make it unrentable and/or is a costly fix you’re not willing to pay for, you’ll need to look for a buyer (another investor) who is. If you are selling a rental property in Massachusetts, we may be able to help. We’ll give a cash offer for the property so you don’t have to worry about the added expense of a realtor. To find out more, click here.
If you’re going to be putting your vacation rental property on the market, you need to find the right realtor. Realtors in Massachusetts charge between 2-5% of the total sale price, so shop around and find a realtor that offers a good percentage and ideally has experience selling a property with commercial appeal in the past. If the property is in a tourist-heavy area, this shouldn’t be much of a challenge.
Your vacation rental property is full of furniture you likely don’t want or need, and selling it all individually isn’t ideal. Instead, consider finding a local secondhand furniture store that can buy the majority of the furniture from you (and take it away), or sell the home furnished. Many investors will be interested in a furnished home (known as a “turnkey” property) because it gives them a chance to pick up right where you left off. This can also be a good option if the property appeals to first-time buyers.
If you’re likely to sell to another investor who also wants to use the property as a vacation rental, you’ll need to show them the rental history, visitor data, and financial documents. It’s a good idea to put these together in a folder you can put on the kitchen counter so anyone being shown the property can see the property’s potential.
Once the property is ready to sell and you’ve got all the details you need, it’s ready to go on the market. From there, it’s up to your real estate agent to help you sell it for a good price.
Unless you’re absolutely sure what taxes you will and won’t have to pay on the proceeds from your vacation rental property, it’s well worth the money working with a tax expert to minimize any additional tax you may have to pay.
If you’re looking to sell your vacation rental property as soon as possible or know it needs repairs, consider selling to another investor. We buy houses in Massachusetts in as-is condition, meaning you don’t need to do any repairs you don’t have the time, money, or will to handle. Avoid realtor fees and close in a matter of weeks – contact us with a few details about your property and we’ll send you our best cash offer. To find out more or to contact us about your vacation rental property, click here.