Many starry-eyed investors find themselves drawn to the idea of investing in real estate properties like Airbnb, and for good reason. For one, real estate can be an incredibly lucrative business. What makes up for big costs is a sizable stream of passive income. If you employ a sound investment strategy, you can achieve ROI in just a few short years, and potentially even live off these rentals.
However, there’s also the other side of the coin to take into account. Many short-term rentals fail to bring in enough profits to remain sustainable.
External factors such as a declining economy and stiff competition could contribute to worsening property market share, resulting in staggering losses. It’s your role as the rental owner to come up with ways to adapt to changing market demands. But it’s also your job to know when enough is enough and to officially cut the cord for good.
While the choice is ultimately up to you, we’re here to provide some ideas on when to exit the scene.
Here are a few reasons to sell your Airbnb once and enjoy the fruits of your labor.
- 1. Unsustainable Pricing Structure
- 2. You're Accumulating To Much Debt
- 3. Short Cycle for Rental Property Maintenance
- 4. Your Rental Property Has Mostly Negative Reviews
- 5. You're Unable to Manage the Airbnb
- 6. Low Occupancy Rate
- 7. Stricter Local Regulations and Policies
- 8. Evolving Guest Preference
- 9. Increasing Competition
- 10. You Need A Quick Capital Boost
- 11. Your Life Priority Has Changed
1. Unsustainable Pricing Structure
An Airbnb’s price is one of the most influential factors for a potential renter to consider. And for owners, it’s a figure that they’ll have to carefully wrangle with to secure the sweet, liminal spot that matches constant demand, continuous income flow, and enough capital for overhead costs.
That said, many first-time Airbnb owners (and even veterans, as a matter of fact) stick a price to their Airbnb rental without careful consideration of their pricing strategy. This may seem insignificant at first, but it can have dire consequences down the line.
TIP: Use a dynamic pricing tool for your nightly rate if you’re seeing this problem.
The most notable consequence is the inability to pay off repairs. As short-term renters switch keys with new tenants at a faster turnover than traditional apartments, this can leave your property more vulnerable to furniture wear and tear.
Razor-thin margins are not enough, as major damage like broken tiles or furniture can cost you hundreds if not thousands of dollars, even if they occur only once or twice a year.
Pricing an Airbnb higher than average can mitigate this risk. But of course, you’ll want to ensure that you can still capture a share of the local market.
Only a few rental property owners can juggle this constantly-shifting balancing act effectively. And if you’re unable to, it’s totally fine to call it quits and sell the Airbnb to a more capable owner. Check this page to know the costs of selling a pre-owned property.
2. You’re Accumulating To Much Debt
Your financial well-being is intimately tied to your ability to run a small business. If your personal financial wealth is in critical condition, it may be in your best interest to dispose of assets to keep you and your dependents afloat.
A bad-performing Airbnb rental is one asset that you could consider selling during your time of financial crisis. That said, even good-performing and slightly profitable Airbnb’s aren’t off the hook as potential ways to liquidate and pay off your debt.
In fact, auctioning off profitable Airbnb rentals can be attractive to a broader set of people and secure you more capital in the long run. That said, always manage your risks wisely and ensure that you’ve covered all bases before making such a major financial decision.
3. Short Cycle for Rental Property Maintenance
Your property is a product first and foremost, and you’ll need to ensure that the property you’re listing in the market is in a fully-functional and livable state.
That said, this also means that you’ll be responsible for conducting maintenance work and regular repairs for your property. This is especially true for cheap and older properties.
Even if the tenant that damaged the property paid off his end of the bargain, you’ll have to account for the opportunity cost of time spent repairing the property and having it unavailable for rent.
If your property has amenities that are prone to breaking easily, and if you constantly have to delist your property as a result of these breakages, it may be better to sell that property to someone else.
4. Your Rental Property Has Mostly Negative Reviews
Another sign to let go of your property is if its feedback consists of purely negative reviews. Hopefully this is not the case!
Reviews are critical for giving prospecting tenants a glimpse of the state of the accommodation before moving in. It’s also used as a comparative measure that can be used to help Airbnb customers make more informed decisions on their next rental.
Having said that, no one would want to stay in a property that’s barraged with 1-star or 2-star reviews. And if your property has a bunch of these reviews tarnishing your name, beware.
Having these reviews mar your property listing could actually repel new customers from considering your place at all.
5. You’re Unable to Manage the Airbnb
While a lot of people can passively run Airbnb rentals (usually by hiring assistants to do the administrative work for them), some people have no other choice but to be heavily involved with their project—which would entail a bunch of extra work on the landlord’s part.
And if the amount of work to manage your rental property exceeds your personal capacity, and you don’t see another way out, then it could be worthwhile to exit entirely.
The reason why you’re occupied doesn’t really matter. Moving abroad, taking care of family, or getting too occupied with your main career are all valid reasons to sell your Airbnb investment. So is simply feeling the burnout and not wanting to be constantly “on-call” anymore.
If you don’t feel like giving your 100% in your rental property investment, then it’s totally okay to leave the scene. Especially if profits are also starting to dwindle or are non-existent.
You can consider a property management company or Airbnb co-host to take some of the weight off your shoulders. With this, the numbers will need to make sense with the additional cost.
6. Low Occupancy Rate
You may have built a well-oiled property rental system, but if no one’s booking your property, then all your efforts are for naught.
Before you launch your Airbnb listing in the market, it’s important to have metrics like occupancy rate and expected ROI in place. This is to ensure that you are meeting projected goals and have a clear idea of your profit targets.
If your occupancy rate is far below profitable metrics, you should reconsider how you’re running things. Depending on your specific situation, you may choose to aggressively market, cut down on costs, or reduce rent availability.
And, in some cases, it might be best to call it quits altogether and simply sell off the property for good.
7. Stricter Local Regulations and Policies
Airbnb’s claim to fame lies in its operations: anyone with a property or a spare room, no matter where you’re from, can earn some income from short-term renters.
That said, there are local regulations in place that can prohibit landlords from renting out their property. If you’re impacted by this and are unable to run an Airbnb property, then you may as well sell your Airbnb.
For instance, in Bangkok, it’s considered illegal to rent a property for daily or weekly use without a hotel license as it goes against the Local Hotel Act, B.E. 2547 (2004).
Furthermore, Airbnb’s in metropolitan cities like San Francisco and New York would need the landlord to claim an operating license, which can be more hassle than it’s worth.
The landlord would also need to stay at the same place as the tenant for stays under 30 days, which can make investing properties for the sake of leasing them out unrealistic and illegal in these cities.
It’s clear that the landscape around Airbnb rentals is dynamic and ever-changing, no matter where you are in the world. If your government has imposed a new law that makes it harder for you to run an Airbnb, it may be a good idea to give it up for good.
8. Evolving Guest Preference
Airbnb was a massive hospitality disruptor at its peak, changing the way people view their holiday lodging with its approachable costs and large space.
That said, this perception is only as good as its relevance, and as of 2023, there’s been a noticeable decline in the prestige of Airbnb among many holiday-seekers.
For one, the rising costs of Airbnb rentals are steering away people who are looking for no-frills but decent stays—more so than the rate of competitive hotels and hostels.
Secondly, accredited hotels come with convenient perks like housekeeping, free breakfast, and bottled water after each night, making it a superior option in terms of day-to-day value.
Airbnb, on the other hand, comes with cleaning fees often without the mid-stay cleaning, making it less value-adding than the standard hotel offering. And while you could certainly add that to your property, that comes with much more manpower on your part.
While Airbnb’s perk is the ability to make your holiday stay feel like a second home, the convenience of hotels in the current year is not to be understated.
If you’ve noticed that tourists in your local area are seeking out hotels more than Airbnb rentals, it may be time to sell your property to some other person for good.
9. Increasing Competition
If your Airbnb rental is in a touristy area, you could run the risk of being a victim of an oversaturation of short-term rentals.
This not only applies to Airbnb rentals, either. Hotels and hostels are valid competitors that you may be up against, and the established ones can be hard to topple if you’re a relatively new entrant in the market.
Furthermore, the large influx of other short-term rental providers can lead to price undercuts and bundling practices. This can make it tremendously more difficult for you to not only acquire customers but to also extract a larger profit per night to keep up with the competition.
The decreased profits can also mean fewer funds will be allocated to marketing efforts like photography and social media boosting, which can further hamper your property’s ability to gain bookings and stay afloat.
If you don’t want to get a massive headache due to this development, it may be best to cut ties with your current Airbnb investment and look for other lucrative opportunities.
10. You Need A Quick Capital Boost
An Airbnb, just like any other investment, is a tool that’s meant to help you remain financially secure and grow your wealth. That said, let’s reiterate: the keyword here is tool.
Sometimes, you will encounter one of life’s many curveballs, which may propel you to dispense immediate capital to solve that problem.
If selling your Airbnb is the only solution that seems reasonable during your time of need, then don’t hesitate to do so.
Selling your Airbnb property can provide the rapid influx of capital you require for your pressing need, whether it’s paying off a hospital bill or procuring equipment to start a more profitable business venture.
You could even sell your property in the hopes of finding a better Airbnb investment—renewing the cycle and potentially profiteering more in the long run.
11. Your Life Priority Has Changed
Even if you’re physically and mentally able to run a property, personal circumstances and priorities evolve over time. This can mean outgrowing the Airbnb scene for good.
You may no longer find the need to grow or manage your Airbnb investment and would rather reap the fruits of your benefits by liquidating it.
This especially relates to senior-aged individuals who no longer have the energy to maintain and manage all the operations behind a rental property. However, anyone can fall under this umbrella as well—and the decision is ultimately yours to make.
Life is fleeting, and there’s no right or wrong way to tread its path. If you find yourself in a predicament wherein selling your Airbnb is the best option, then don’t be afraid to do so. You’ll never know what new opportunities await beyond the door.
Happy investing!
Hey, I’m Melissa… As an Airbnb Superhost and someone who is passionate about investing in real estate, I created Beach Life Bliss to share my experiences and help short term rental operators. I have been a landlord for over 10 years and started my first Airbnb property in 2019.
Creating a space with amenities that guests love, beautifully designed rooms, and providing exceptional hospitality will make your Airbnb business thrive.
I hope that all of my Airbnb hosting resources are helpful as you navigate the challenges and rewards of being an Airbnb host!