Selling a Vacation Rental Property? Read This First

Approximately 1.7 million unique vacation homes in the U.S. are listed on online travel agency sites like Airbnb and Vrbo. Connor Griffiths, CEO of Lifty Life Vacation Rentals, a vacation rental management company, points out that the ideal locations for short-term rentals are major cities, oceanfront or lakefront homes, or skiing destinations — but short-term rentals are also growing in other areas.

Signs that it’s time to think about selling a vacation rental property

Owning and operating a vacation rental can be a lucrative and enjoyable pursuit — until it’s not. If any of these factors apply to your situation, it might make sense to reach out to an agent to explore selling your vacation rental property:

Your rental income isn’t covering your expenses

Cash flow should be the primary driver of the selling decision, says Kathy Fettke, a real estate investor with Real Wealth Network. “If the income doesn’t cover your expenses, then it is a negative income property. That means you are feeding it, rather than it feeding you.”

The capitalization rate (cap rate) ties into this. The cap rate is calculated using the following formula: income minus expenses, divided by purchase price. “If your cap rate is weak or failing, you may want to focus on other investment opportunities that will generate a higher return,” Griffiths says.

For example, if you receive $120,000 in rental income each year and pay out about $50,000 for maintenance, repairs, and taxes, and the property was purchased for $1.5 million, the cap rate formula would look like this:

$120,000 – $50,000 = $70,000

$70,000/$1,500,000 = 4.67% cap rate

The market is favorable for sellers

“Once the pandemic started, we saw a massive uptick in short-term rental interest,” says Darren Tackett, a Scottsdale, Arizona, real estate agent with 28 years of experience. “Because of all the lockdowns, people were just going nuts. People were coming here to rent places to escape restrictions, and a lot of them decided they liked it here and decided to buy a house.”

But a red-hot seller’s market can’t last forever. According to top real estate agents surveyed by HomeLight, 41% considered their market a buyer’s market in the first half of 2025.

In the National Association of Realtors® (NAR) October 2025 survey, respondents reported that contracts typically closed in 30 days. Despite the continued housing shortage, a steady 16% of buyers still buy for non-primary residence use, and 4% buy for vacation, both essentially unchanged since last year.

If you need to sell your vacation rental property quickly, HomeLight’s Simple Sale platform can get you an all-cash, no-obligation offer within 24 hours. You can close in as few as 7 days without any extra fees, agent commissions, or prep work involved. To get started, you’ll need to answer a few basic questions regarding the condition of your home, how much work it needs, and your selling timeline.

Big-ticket repairs are on the horizon

Bill Samuel, property investor and owner of Blue Ladder Development, says the overall condition of the property should be one of the key factors in deciding whether to sell.

“It’s wise to sell before you expect capital expenditures to come due,” he says. “These are the larger expenses that are required to maintain a home, such as replacing a roof, furnace, fence, or windows.”

Samuel also suggests evaluating the home’s appeal in terms of upgrades. As an example, one of his Illinois properties was renovated with a new kitchen and bathrooms in 2015. While the upgrades may still be relevant today, he expects that might not be the case in another, say, five years, at which point he probably won’t be able to sell at the higher end of the neighborhood’s range.