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What are the benefits of rental arbitrage?Hosting short-term rentals can be extremely profitable, and Airbnb rental arbitrage is a great way to grow your business without the capital to invest in multiple properties. One of the most appealing aspects of rental arbitrage is that it is possible for hosts who do not own property to make a hefty income.
The average market price is about $1,400/month. The average Airbnb rental price for an entire space in Nashville is $188/night (the price was about $209/night pre-pandemic). This means that you could cover your entire property rent in just 8 days of renting. After eight days, you are pocketing the profit for Airbnb upkeep, cleaning, and disposable income.
The benefit of rental arbitrage over the property management model is that you only have to pay the landlord, and generally will keep 100% of the income. The property management model, where you manage properties for homeowners, would require shared profit and blackout dates if hosts decided to use the property for their personal enjoyment.
Those risks include:The market conditions are always changing, and your property could be affected. Before setting off on rental arbitrage it’s important to consider the stability of the housing market in your area. We’ll discuss the best and worst cities for Airbnb arbitrage in the next section of this post.
A way to counteract the offseason is to provide discounts or special offers on weekly stays to entice guests to choose your short-term rental. What are the best cities for Airbnb arbitrage? Below are charts depicting the best and worst cities for Airbnb rental arbitrage based on how much profit you make and the law friendliness for Airbnb arbitrage.
If your landlord has any objections they are likely to be one (or all) of these three: local laws, unvetted guests, and insurance. Before initiating any contract or conversation with your landlord, research what your city’s laws are in regards to rental arbitrage. This way you have all the answers going into the conversation with your landlord, and already know if your area is profitable for Airbnb rental arbitrage.
Be sure to provide guests with the Airbnb house rules and an Airbnb house manual upon booking so all parties are on the same page. If a guest damages an Airbnb and does not reimburse the host, Airbnb guarantees that they will provide up to $1,000,000 in property damage protection.
After you and your landlord have come to an agreement on using the space as an Airbnb, it’s time to make it legal. You take the fall for any fines: Before setting off on this course you have already researched and ensured that Airbnb arbitrage is legal in your area.
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How To Create A Great Vacation Rental Property - Short term rental business Wilmington-North-Carolina
How To Become An Airbnb Host And How Much Can You Make? - Short term rental business Jurupa-Valley-California
How to Start a Short Term Rental Las-Vegas-Nevada: How Much Do Vrbo Hosts Make?