What is Airbnb rental arbitrage?
Airbnb rental arbitrage refers to the practice of renting out properties and subletting them through the Airbnb platform. As home prices continue to rise, it is becoming increasingly difficult to own property. This strategy will allow you to create cash flow and avoid the hassles of home ownership.
Imagine renting an apartment at $2,000 per month. You could rent the same apartment for $2,000 per month by renting it on Airbnb at $150 per day. This would pay your rent off in less than two weeks. After you have paid the rent, the remainder of the month is yours to keep. Short-term rental arbitrage, which can yield $2,000 per month, is a way to increase your income without having to own property. This is a gross oversimplification. Short-term rentals can be costly.
Does it sound too good to be true Both yes and no. In some markets, Airbnb rental arbitrage can be a profitable tactic. This is a great strategy that many investors use to rent out cheap properties in order to make more. But, you need to do your research before jumping in.
Is Airbnb rental arbitrage legal?
In your area, Airbnb rental arbitrage may be legal depending on the regulations. So do your research first. Most large cities around the globe are changing their short-term rental laws. It is important to check whether Airbnb or other rental options are permitted in your city. If vacation rentals are permitted in your area, then you will need to verify if your municipality, state, province, or country requires you to apply to a hospitality license.
After this, check to see if the landlord allows vacation and short-term rental arbitrage. This is sometimes prohibited by landlords or only permitted on a case-by–case basis. You could be evicted if you don't check with your landlord before subletting an apartment.
