Getting Started & Rental Arbitrage Strategy

[Mike Jones]

Hi everyone,

My name is Mike Jones. I'm 25 years old and I’m new to the Bigger Pockets community and pretty much just getting started in my real estate investment journey. By just getting started, I mean I’ve done my fair share of research and looked at what strategies make the most sense for me early on but have not yet acquired my first property. Analysis paralysis is a real thing – I’m hoping to make some moves here soon. I have a few questions that I was hoping to get some perspective on from more experienced investors or even those who are newer to the game like myself but maybe already have a property or two.

My goal is to eventually get into traditional long-term buy and hold rentals. I’m interested in multi-family properties (duplexes, triplexes, quadplexes). As I continue to save up to make sure I’m in a solid enough financial position to get started, I’ve been learning more and more about short-term rentals, specifically looking at the rental arbitrage approach signing corporate leases and renting them out on a short-term basis on Airbnb and other vacation stay websites. I have a pretty good understanding of the pros and cons and what it takes to get started, but I was hoping to connect with others who have done this to hear what their experience has been and see what advice they have.

For some context, I currently live in Bloomington, IN. so it’s not exactly the ideal short-term rental location to say the least. I’ve heard mixed things about investing in these types of properties outside of your own backyard and wanted to see if others have done so and how well that worked or didn’t work. I have some roots in Columbus, OH and connections in Charlotte, NC so those are two other markets I have considered. I’m not sure if the short-term rental strategy would work if I invested in an entirely different market from where I live, let’s say Nashville, TN for example. Like I said, just looking to get connected with other investors and get some advice on how to get started so that I can take the next steps with this!

[Remington Lyman]

Originally posted by @Mike Jones:

Thank you both for your responses! I've certainly considered investing in Columbus (went to school at Ohio State) or Cleveland (where I grew up) once I get into long-term buy and hold properties, but I'm concerned about the seasonality of those locations for short-term rentals. I think it's still worth exploring though. 

As for house hacking, that's something I've become pretty familiar with and I'm definitely interested, but I'm having a hard time finding feasible duplexes or other similar property types to make that work in my current place of residency (Bloomington, IN.). Most of the housing around here is single family homes or larger apartment complexes. Good advice nonetheless as I know that's a strategy many investors have used to get their foot in the door! 

 I have 12 airbnbs in Columbus, Ohio. They print money