Phoenix Metro Daily Rental Arbitrage

[Gabriel Graumann]

Who's actively engaged in daily rental arbitrage in the Phoenix metro, primarily in the Scottsdale/Mesa/East Valley markets? I'm putting a higher-end home under contract in the East Valley area of Phoenix and due to the location, size, and quality of living areas inside and out, I believe it's going to make a fabulous daily rental. We already have one group presenting us with an offer to sign a master lease for 4-5 years with the knowledge they intend to arbitrage it as a daily rental. They are presenting us with an offer to lease at a 20% increase over market rental rates, cover all expenses under $250, all other typical costs paid directly by them including pool maintenance, and give us 2-3 weeks of use annually (not holiday periods). We were "clients" of this group when we rented one of their houses for a month in April 2020, so we've seen them work a bit closer than many, and the house we are getting is an identical layout to the one we stayed in so we know the house very well also. It's in one of the most desirable, master planned communities also. 

QUESTIONS:

1. If you're in this space, what are the terms you've been offering to owners like me for the daily rental arbitrage opportunity?

2. Would utilizing a management company that handles daily rentals on my behalf present a larger return than doing one of these master leases, even with the additional liability and "business costs" such as furnishing, maintaining, utilities, etc.?

I'm out of state and we don't intend to live full-time out of this house for at least 5 years. Thanks in advance!