Updated September 28, 2026
Two of your fourteen units have been running as short-term rentals for the past year, bringing in more than a standard lease ever would. That income is real, and it's also the reason your next buyer's underwriter is going to ask harder questions about this building than about the one down the street with fourteen ordinary leases.
A 2026 buyer wants a rent roll that ties to reality — the general standard for every unit in the building. Short-term rental income is real revenue, but it isn't stabilized rental income in the way a lender or an institutional buyer underwrites a multifamily acquisition. Nightly or weekly bookings fluctuate with season, platform algorithm changes, and local enforcement activity in ways a twelve-month lease simply doesn't. Most conventional multifamily lenders will not credit short-term rental income at face value in their underwriting; they typically apply a steep discount or exclude it entirely and value the unit as if it were converted back to a standard lease.
Los Angeles regulates short-term rentals under its own registration and hosting rules, separate from rent control (RSO) or general landlord-tenant law. Before a buyer's counsel even gets to the income conversation, they'll want to know whether the units are properly registered and operating within the local ordinance's limits, or whether they're unregistered and exposed to enforcement action that could shut the income down with no notice. An unregistered short-term rental unit is a bigger risk flag to a sophisticated buyer than a properly registered one generating identical income, because the unregistered version can disappear the day the city notices.
If a buyer's underwriting assumes the short-term rental units convert to standard long-term leases, that conversion isn't automatic or instant. Depending on how the unit has been operated and what rent control coverage applies to the building, converting a short-term rental back to a standard tenancy may involve its own timeline and process — this is a conversation for your attorney, specific to how the unit has actually been used and documented.
Registration and compliance documentation. If the units are properly registered under the local short-term rental ordinance, have that documentation ready. It's the single fastest way to differentiate your building from the unregistered version buyers are wary of.
Actual booking and income history, not projections. A year or more of documented platform income — not a hopeful annualized estimate from three good months — is what a buyer's underwriter will actually credit, if they credit it at all.
A clear position on what happens post-sale. Decide, and be ready to discuss, whether the short-term rental units are expected to continue, convert to standard leases, or be handled however the buyer prefers. A seller with no position here creates more buyer uncertainty than one who's already thought it through.
Institutional and lender-financed buyers in particular tend to discount or avoid buildings with a meaningful share of short-term rental units, precisely because the income is harder to underwrite and the regulatory exposure is real. That narrows your buyer pool relative to an identical building with fourteen standard leases — which doesn't mean the building won't sell, but does mean pricing and buyer expectations should be set with that narrower pool in mind from the start. The broader question of how buyers evaluate a rent roll in 2026 applies here with extra weight.
Short-term rental units aren't disqualifying, but they are a fact that changes who's likely to buy your building and how they'll price it. Sellers who document registration compliance, present real booking history instead of best-case projections, and have a clear position on post-sale conversion give buyers something concrete to underwrite. Sellers who present the Airbnb income as if it were ordinary rent, with no supporting documentation, are the ones who watch their asking price get discounted in negotiation instead of upfront. The full preparation sequence for a sale is covered in how to sell an apartment building in Los Angeles.
Will a lender finance a building with Airbnb units?
Often yes, but the lender typically discounts or excludes the short-term rental income from underwriting and values those units closer to standard-lease income instead.
Do I have to disclose that units are being used as short-term rentals?
Yes. It's a material fact about how the property currently generates income and about its regulatory compliance status, both of which affect a buyer's underwriting and risk assessment.
Does short-term rental income increase my building's sale price?
Not reliably. Most buyers discount it relative to standard lease income because of its variability and the local compliance risk, so it rarely adds value dollar for dollar the way it might appear to on a current income statement.
Michael Sterman is Senior Managing Director Investments at Marcus & Millichap.
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