Exit Ready: What Buyers Look for in Short-Term Rental Companies

Thinking about selling your short-term rental (STR) business, or just want to build a more valuable one? In a recent Topkey-hosted webinar, industry experts unpacked what it really takes to get “exit ready.” Whether your timeline is next year or five years out, the insights shared can help you run a healthier, more scalable, and more sellable business.

The panel featured:

• Dylan Burgess, VP of M&A at C2G Advisors
• Dustin Abney, CEO of Portoro
• Nick Roso, Principal at Stoic Lane
• Hosted by Darren Carter of Topkey

Here are the key takeaways from this high-impact session:

1. The Current State of M&A in STR

Mergers and acquisitions in the vacation rental industry are back on the rise. While the post-COVID era brought volatility and uncertainty, the market is now showing signs of stabilization:

• Buyers and sellers are regaining confidence.
• Valuations are more predictable.
• Deal flow is increasing.

As Dylan put it, “We’re not back to 2021’s all-time highs, but we’ve returned to a balanced, healthy M&A market.”

2. What Buyers Are Looking For

If you're hoping to attract a buyer, you need more than a decent portfolio, you need operational excellence. The panel broke it down into key areas:

Market Strategy

• Portoro targets emerging premium markets (e.g., Winter Park, not Aspen).
• Stoic Lane prefers traditional vacation markets with consistent demand and less regulatory risk.

Financial Health

• A stable revenue stream with $1M+ in EBITDA is typically the floor for most platform acquisitions.
• Smaller companies can still sell—but often at lower multiples unless there's exceptional growth or strategic value.

People and Operations

• Great local teams are non-negotiable.
• A business that runs smoothly without owner involvement is highly attractive.
  • “If you can take a month-long vacation and your business doesn’t implode, you're on the right track.” – Nick Roso

3. Top Metrics That Matter

If you're planning to sell, or simply want to operate like a pro, track these metrics religiously:

1. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) – the core valuation metric.
2. Gross Revenue & Take Rate – how much you make and how much you keep.
3. Homeowner Churn – not just the number, but the reason behind it (e.g., sale, dissatisfaction, competitor switch).
4. Unit Mix & Property Profitability – understand which homes are driving margin.
5. Guest Reviews – reputation matters; tools like Revinate can help track feedback.
6. Direct vs. OTA Bookings – a healthy split (30–40% direct) signals brand strength.

4. Clean Financials Are a Must

Every panelist agreed: messy books are deal killers. If you want to exit, or scale, you need solid financial reporting. This includes:

• Up-to-date P&Ls
• Itemized expenses
• Clear commission/fee structures
• Reconciled channel fees
• Payroll and cleaning cost visibility

“If you plan to run your business like you're going to sell it, whether or not you actually do, you’ll run a better business.” – Dylan Burgess

5. Valuation Multiples: What to Expect

Multiples vary depending on company size, profitability, and market complexity. Here's a quick breakdown:

• < $1M EBITDA: Typically 3–5x
• > $1M EBITDA: Can go 5x+ depending on growth, team, and operational maturity
• Platform-worthy businesses with 150+ units and full teams are commanding higher multiples
• Per-unit acquisitions may be based on 1.25–1.75x annual commissions

Remember: structure matters. Earn-outs, seller financing, and other creative terms can help bridge valuation gaps.

6. Deal Structure & Post-Sale Integration

The deal doesn’t end at the close. A successful acquisition depends heavily on:

• Alignment of values and vision between buyer and seller
• Integration support and team retention
• Strategic growth potential, not just current numbers

Nick emphasized, “If you’re not aligned with the buyer, the transition’s going to be rough. It’s not just about the numbers, it’s about where you’re going.”

7. Steps to Take Now (Even If You're Not Selling Yet)

• Hire accounting help (in-house or outsourced)
• Track key metrics: unit growth, churn, take rate, profitability
• Document everything—especially reasons for churn and source of new owners
• Invest in tools like Topkey for real-time visibility
• Talk to advisors like C2G, even just to assess readiness
• Build a strong team that doesn’t depend on you

Final Thoughts

This session wasn’t just about preparing for a sale, it was a masterclass in building a resilient, well-run business.