Airbnb Rental Arbitrage Guide

[Dennis Henderson]

I'm looking to connect with investors that have successfully done Rental Arbitrage for Airbnb in the past.  

I live in a hot spot for vacation rentals (Clearwater / St Petersburg, Florida), and have been researching the regulations in my area for short term rental rules for a few months now.  I'm unfortunately not in a position to purchase an investment home due to my current circumstances taking the leap of faith and moving from a W-2 to a 1099 last year, so I'm looking to see what I can do to get into the investing game.  This has lead me to the thought of Rental Arbitrage because I have enough cash in the bank to be dangerous but not enough to pay cash outright for a home in my area.  I don't mind calling the landlords and I know I can make some deals happen if I'm not blindly going into it with no experience an w/o someone that's done it before to help answer questions. 

-Dennis

[Dan Maciejewski]

You can make great money if you know what you're doing. 

Arbitrage is not a wrong, description but what you're talking about is a Master Lease situation.  If I was you, I would already have some idea of what exactly I'm asking for as I call landlords and propose this to them.  And by that, I mean, I would already have a master lease drawn up with terms in it.  Hopefully by an attorney.

And you'll have to have some idea of why they would forgo income that you'll be able to earn when they do this.  Because if you came to me and asked to take a master lease on one of my properties, I would say, "What's stopping me from just turning my property into a short term rental myself?"  There are answers to that that may make sense, but in my case, I know it's not complicated at all to run an STR.  Although I have the benefit of being in the space, and a partner that has been in hospitality management in the area for decades.

Some ideas (BTW, these are what to look for in a short term property manager):

You know exactly how to turn a property the fastest and most economical way, and have the best inspectors.
You know exactly what the guests are looking for in terms of arrival experience, cleanliness, and decoration.
You know exactly how to adjust rates to be the most competitive and maximize ADR.
You monitor your comp set daily and adjust rates and minimum stays accordingly.
You area a business owner and run forecasts and P&Ls like a big business.
You handle the purchasing and renewal of soft goods, and the owner won't need to worry about that.
You can increase their cash flow with zero extra work on their part!

Also, neither Clearwater nor St Pete allow less than 30 day rentals (St Pete will allow 3 less than 30 in a rolling year).