When and how to sell your vacation rental property

Key takeaways

• Consider working with real estate agents well-versed in vacation rentals. They will understand you’re not just selling a home, but also a business.
• Be prepared with the right paperwork to show potential buyers your home’s income potential.
• Continue to book and assist guests during the selling process, while making it available to prospective buyers to tour.

Perhaps you’re not using your vacation home as much as you used to. Or, your children have all grown. Or, you have your eyes set on new investment. Whatever the reason—you’ve now decided to put your vacation rental on the market.

Before you lock the front doors and put up that ‘For Sale’ sign, here are five tips to help you avoid losing money and paying a hefty tax bill.

1. Make sure selling is a smart financial move

Even if you’re confident you want out, it’s wise to hire an accountant before you put the house on the market. It’s vital to understand all the financial outcomes. For instance, if you want to invest in another property, you may discover (too late) that it was best to stick with your original property once you factor in closing costs and current interest rates.

2. Partner with a real estate agent who knows the vacation rental market

Vacation rental properties are a special breed of real estate. Agents well-versed in these short-term rentals will understand that you’re not just selling a home, but a business. And, they’ll know how to position your property to investors looking for both the best cap rate and curb appeal. The Vacasa Real Estate team is one such trusted resource. Here’s what they can offer:

• Expert rental industry insights
• Knowledge of existing rules and restrictions in the vacation rental market
• The largest list of vacation home buyers in the U.S.
• A custom MLS listing tailored for vacation homes
• Listing syndication, flyers, and yard signage
• Complimentary professional HD photography
• Network of experts in vacation rental real estate

3. Pick the right time to list

While there’s no magic time to put your vacation home on the market, some months may be better than others—based on your destination. You could consider listing right before your high season. Some benefits:

• Your property is likely in prime condition
• A booked calendar of upcoming reservations makes a stronger case for your home
• Buyers can start making money right away

If the buyer needs to invest in improvements or repairs before they can host guests, you might want to sell well ahead of your busiest time of the year. This will give the buyer time to get the property in tip-top shape to maximize the high season.

On the other hand, if your timeline to sell is years out, consider selling before expensive, big-ticket repairs and replacements are due—such as replacing roofs, flooring, or windows.

4. Show buyers the money

Many vacation rental buyers are real estate investors looking for a cash-flowing asset, not just a second home for personal vacations. So, come prepared with evidence that your home can turn a profit. Some paperwork and facts to collect ahead of time:

• Rental income history
• Financial projections
• Profit and loss (P&L) statements
• Tax returns
• Vendor contracts
• Visitor numbers, including the amount of travelers that visit your destination every year (you can get this from the local tourism authority)
• Major attractions in your area and the distance from each
• The top reasons why guests book your vacation rental (this often isn’t evident in financial statements)

Also, do you have any unique features that aren't currently being used, such as a granny flat or a basement with a private entrance? Make sure buyers know there is potential for even more rental income.

5. Don’t stop booking

Deals can fall apart. Potential buyers can disappear. Financing can fall through. Even if you believe your vacation rental will sell quickly, keep rental income flowing and your guests happy. One of the appeals of investing in a vacation rental is that it comes with turnkey business assets and systems that make money—from your listings on vacation rental sites to your cleaning procedures after guests check out.

Here are two ways to continue booking guests, while making it available to view for prospective buyers:

1. Block out light travel days for property showings, such as Tuesday or Wednesday. Let buyers know ahead of time that you are committed to respecting your guests’ privacy and getting 5-star reviews.
   
   
2. Create a video and offer quality photos so buyers can examine your home online (if your vacation rental was managed by Vacasa, we provide complimentary virtual tours and professional photography—even before you get your first reservation).

There’s a lot to navigate when selling your vacation rental without losing money. From getting the right details in order to listing at just the right time—these tips can help you maximize your earnings while your vacation home is on the market.