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How To Start Airbnb Arbitrage?

How To Start Airbnb Arbitrage?
by John Carlucci - January 24, 2022

How can you develop a business around Airbnb? One common myth is that you must own property to earn money with Airbnb. Airbnb rental arbitrage is one approach to avoid the dangers of buying and holding properties.

Airbnb Rental Arbitrage

The practice of renting and subletting houses on the Airbnb website is known as Airbnb rental arbitrage. Since 1960, home prices have greatly exceeded median salaries, making property ownership increasingly challenging. As a result, this technique allows you to generate income flow while avoiding the stress and problems of property ownership.

Consider renting a $2,000-per-month apartment. You could pay off your rent in just under two weeks if you sublet the same apartment on Airbnb for a month at $150 per day. The rest of the month is pure profit once you've paid off the rent. 

After eliminating probable maintenance and overhead expenditures, short-term rental arbitrage allows you to expand your income and save without owning property, with a monthly profit of $2,000 in our case. Of course, that is an exaggeration. Operating short-term rentals incur costs.

Airbnb rental arbitrage is a strategy that can be effective in certain areas. It's a terrific approach for many investors to make extra money with low-cost rental homes. However, you must perform extensive due research before going in with both feet.

Is it Legal?

Airbnb rental arbitrage is permissible, depending on your state's short-term rental laws. So first and foremost, do your homework. In most major cities around the world, short-term rental policies are changing. You'll want to make sure that rental choices like Airbnb are permitted in the city you're interested in and that you don't have a limit on the number of nights you may rent out to guests each year. If holiday rentals are permitted in your area, you must first determine whether your city, township, state, or province will require you to obtain a hospitality license.

After that, double-check with the landlord to see if short-term and vacation rental arbitrage is permitted. Some landlords expressly state in their leases that this is not authorized or permitted only on a case-by-case basis. If you sublet your apartment without first consulting your landlord, you run the danger of getting evicted.

Visit our blog section to learn more about how you can succeed in Airbnb Arbitrage.

Author

  • John has worked alongside Real Estate Giants across USA and Canada for decades. Since he started Prudentialcal, he has been actively rendering service as business adviser to many companies in the real estate industry. He formed Prudentialcal in hopes of providing the most reliable stories and information there is in the vast industry of real estate

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