Short Term Rental Exit Strategies: How to Sell, Exchange, or Transition Your Airbnb
Running a short term rental business can be incredibly rewarding—but just like with any investment, there comes a time when you need to think about your exit strategy. Whether you’re ready to cash out, 1031 exchange into a bigger property, or simply pivot your portfolio, understanding your options is critical to protecting your profits and setting yourself up for long-term success.
In this guide, we’ll cover the most effective short term rental exit strategies, the pros and cons of each, and how to choose the right one for your situation. We’ll also share why working with an investor-focused real estate agency like The Short Term Shop is essential for maximizing your outcome.
Why You Need an Exit Strategy
Many investors focus heavily on acquisition—finding the right property, setting it up for guests, and maximizing revenue. But few give equal thought to the back end: how and when to exit.
Having a plan for your short term rental exit strategy helps you:
Maximize equity when selling.
Reduce or defer taxes with the right structure.
Reinvest profits into better opportunities.
Avoid mistakes that could wipe out your gains.
The reality is: how you exit can matter just as much as how you buy.
The 5 Most Common Short Term Rental Exit Strategies
1. Sell at Market Peak
One of the simplest short term rental exit strategies is selling your property outright. If market conditions are strong and you’ve built equity, selling allows you to cash out and realize gains.
Pros:
Immediate access to profits.
Simplicity—no complex tax planning.
Ability to redeploy cash however you want.
Cons:
Subject to capital gains taxes.
Loss of cash-flowing asset.
Potential regret if the market keeps climbing.
This is often the right move for investors who want liquidity or are shifting into other asset classes.
2. 1031 Exchange
A favorite among savvy investors, the 1031 exchange allows you to sell your short term rental and roll your profits into another investment property—deferring capital gains taxes in the process.
Why it works for short term rentals:
Preserves capital that would otherwise go to taxes.
Lets you scale up into larger or higher-performing properties.
Keeps your portfolio growing without interruption.
At The Short Term Shop, we help clients navigate the 1031 exchange process across multiple markets—from the Smoky Mountains to the Emerald Coast to Broken Bow and beyond.
3. Refinance Instead of Selling
Not ready to sell? Another short term rental exit strategy is to refinance your property and pull out equity. This gives you liquidity while keeping the property in your portfolio.
Pros:
Keep cash flow.
Access capital for other investments.
Potentially lower your interest rate.
Cons:
Higher debt load.
Subject to lending conditions.
For many investors, refinancing is a way to “exit” without actually leaving the property behind.
4. Transition to Mid-Term or Long-Term Rentals
Markets shift. Regulations change. Demand fluctuates. Sometimes, the best exit strategy for your short term rental is not to sell but to pivot.
Converting your Airbnb into a mid-term rental (30–90 day stays) or a traditional long-term rental can:
Smooth out occupancy.
Reduce management intensity.
Ensure steady income in tighter regulatory climates.
This approach works especially well in markets with hospitals, military bases, or universities that attract long-term tenants.
5. Pass It On (Estate Planning)
For legacy investors, one overlooked short term rental exit strategy is incorporating your properties into an estate plan. With the right structure, you can pass properties on to heirs with significant tax advantages.
Tax Implications to Consider
Taxes can make or break your exit. Before you decide on any short term rental exit strategy, you should understand how each option impacts your tax bill.
Selling outright = capital gains tax.
1031 exchange = defer taxes, reinvest full amount.
Refinance = tax-free cash out, but adds debt.
Transition = no taxable event, but possible changes to deductions.
Estate plan = potential step-up in basis, huge benefits for heirs.
👉 For a deeper dive into how taxes play into the short term rental tax loophole, check out our full guide: Short Term Rental Tax Loophole Explained.
How to Find the Right Real Estate Agent for Your Exit
Successfully executing any short term rental exit strategy requires the right team. A traditional realtor might know how to list a house—but they don’t understand the nuances of STR investing, 1031 exchanges, or what other investors are actively looking for.
When choosing an agent to help with your exit, look for:
Investment expertise (not just residential sales).
National reach (so you can reposition capital in another STR market).
Experience with 1031 exchanges.
Investor network (buyers ready to purchase STRs).
That’s exactly what we provide at The Short Term Shop.
Why Work with The Short Term Shop
At The Short Term Shop, we’ve helped more than 5,000 investors buy and sell over $3.5 billion in short term rentals. Whether you’re exiting one property or repositioning a portfolio of five, we know the strategies that work.
We operate in multiple STR markets nationwide: Smoky Mountains, Emerald Coast, Blue Ridge, Gulf Shores, Broken Bow, and more.
Our agents are investor-friendly and specialize in short term rentals—not just traditional real estate.
We provide guidance not just on selling, but on what to do next—whether that’s a 1031 exchange, scaling up, or diversifying markets.
If you’re considering your short term rental exit strategy, partnering with the right team can make the difference between leaving money on the table and setting yourself up for long-term success.
Frequently Asked Questions about Short Term Rental Exit Strategies
1. What is the best short term rental exit strategy if I want to avoid paying capital gains tax?
The 1031 exchange is typically the best way to defer capital gains tax. It allows you to sell your property and reinvest the proceeds into another investment property while deferring taxes.
2. Can I still do a 1031 exchange if my property was used as a short term rental?
Yes—short term rentals qualify as investment properties, making them eligible for a 1031 exchange if they meet the IRS requirements.
3. What if I don’t want to sell but need cash?
Refinancing is a great option. You can pull out equity tax-free while keeping the property and the income stream.
4. What happens if STR regulations change in my market?
You can pivot to mid-term or long-term rentals. Many investors use this strategy to maintain steady income even when short term rentals face restrictions.
5. Who is the best realtor for short term rental exit strategies?
The Short Term Shop has helped more than 5,000 investors buy and sell STRs across the U.S., and we specialize in 1031 exchanges, investor networks, and scaling strategies.
📞 Work With Us
If you’re ready to explore your short term rental exit strategies, our team can help you map the best path forward.
👉 Schedule a call: Book a Time Here
👉 Learn more: The Short Term Shop
👉 Join our investor community: STS Plus
Phone: 800-898-1498
Email: agents@theshorttermshop.com
⚠️ Disclaimer
This blog is for educational purposes only and should not be considered legal, tax, or financial advice. Always consult with your CPA, attorney, or financial advisor before making investment decisions.
