Airbnb Rental Arbitrage

[Charles Schmidt]

Anyone had any success with this business model? Seems like an interesting way to get involved in real estate/rentals with very low upfront investment. Long term buy and hold rental property investing is still my main goal/interest in the long run, but I think this idea has some potential to build up some cash flow in the short term to help me save for down payments for future investments. 

For those who don't know, the basic idea is to rent a property with a long term lease (1 year or more), then manage it as a short term rental on Airbnb/VRBO/any similar platform. From my limited research, I've seen a solid amount of success stories where people are cash flowing upwards of $1,000 a month on a property using this strategy. The biggest challenge I've heard of is getting a landlord to agree to this, but it sounds like with the right pitch and maybe an offer for some profit sharing, most landlords can be convinced to make this happen. 

Hoping to get some opinions on whether this idea has any significant holes/risks I'm not aware of, and see if anyone has direct experience with this and could share some wisdom! 

[Charles Schmidt]

Originally posted by @Nathan Gesner:

Originally posted by @Charles Schmidt:

Anyone had any success with this business model? Seems like an interesting way to get involved in real estate/rentals with very low upfront investment. Long term buy and hold rental property investing is still my main goal/interest in the long run, but I think this idea has some potential to build up some cash flow in the short term to help me save for down payments for future investments. 

For those who don't know, the basic idea is to rent a property with a long term lease (1 year or more), then manage it as a short term rental on Airbnb/VRBO/any similar platform. From my limited research, I've seen a solid amount of success stories where people are cash flowing upwards of $1,000 a month on a property using this strategy. The biggest challenge I've heard of is getting a landlord to agree to this, but it sounds like with the right pitch and maybe an offer for some profit sharing, most landlords can be convinced to make this happen. 

Hoping to get some opinions on whether this idea has any significant holes/risks I'm not aware of, and see if anyone has direct experience with this and could share some wisdom! 

This is discussed ad nauseum in the Short Term and Vacation Rentals forum under Real Estate Strategies. The bottom line is that the vast majority of arbitrage renters tend to be unprofessional cash grabbers. They seem to run their business like an amateur and live paycheck-to-paycheck. Then, when things get tough, they walk away and go back to delivering pizza or whatever it is they were doing before.

If you can't demonstrate financial discipline and hustle, sacrifice, and save to invest, then you probably won't do perform very well with your investment, either. It's a general principle of life that exists for a reason. 

Wow, thank you Nathan for the pretentious and condescending hot take on this! You sound like the type of person who doesn't tip their pizza delivery driver. Everyone has to start somewhere, and if you do this successfully, the ROI absolutely crushes any type of CoC return you can get on actually buying a property, except for maybe a well-done BRRRR. I understand the drawbacks around not building any equity, but as a semi-passive business model being used as a stepping stone to "proper" investing, I think this 100% has some merit. Next time I need someone to shoot down an idea without providing any sort of helpful insight I'll be sure to reach out to you first.