rental arbitrage in Tampa/ St Petersburg

[Keleisha Carter]

Anyone doing rental arbitrage in Tampa area? I would like to know your strategy for finding these landlords, especially in large apartment buildings if you are dealing with a property management company

[Darren Sager]

Funny you mentioned this. Check out the BP's Real Estate Events & Happenings area as there's an event this week which will be covering the topic in Tampa, for Tampa region.

[Jared Prevost]

Hi Keleisha,

I know of a number of younger investors who are considering, or have done, rental arbitrage in Tampa. I myself have a 1/1 apartment on Davis Islands near the hospital that I'm considering renting to traveling nurses.

The problem with rental arbitrage is that you need leverage as the renter to negotiate assignable lease terms with your landlord. With rent demand being so high, it can be hard to make the numbers work, and it is so easy for property managers to fill units, that there is little justification for taking on the risk of dealing with Airbnb issues.

To illustrate, I will give a personal example. I rented my apartment a few weeks ago and pushed really hard on the landlord to give me permission to either sublet or assign my lease terms. I told the manager I've managed a portfolio of short-term rentals and that my previous landlord allowed me to do it and loved that it created an incentive for me to take exceptional care of the property. I was firmly denied and told, "we strictly do not allow short-term rentals, subletting, or anything similar". On the day I moved in, I found out the property managers had other units in the apartment complex listed on Airbnb because an Airbnb guest tried breaking into the wrong unit (the police were called). The moral of the story here is that vacancy is so low right now, especially in Tampa, that it is very difficult to get flexibility with your lease. That's not to say it can't be done, but these opportunities are few and far between right now.

[Doug Lucas]

I'm actually in consideration of allowing an individual to conduct rental arbitrage with a rental of mine. Reason, if the individual is willing to give me top dollar rent and thinks he can still make a profit, then it's a win/win. The hurdle that we are facing is insurance. I've contacted 8 insurance companies/brokers and no one offers policies (issue being the subleasing). I would love to know what type of homeowner's policy any of the owners in rental arbitrage have. I've been told by the insurance companies/brokers that a basic Homeowner's or even a commercial policy will not do. And that the lessee's AirBnB policy/program is inefficient in filling the gap as well. It's too much risk for me until someone can give concrete suggestions of how insurance policy(ies) can accommodate the rental arbitrage scenario.

[Jillian Lofrese]

[Viji Venkatachalam]

I am also looking for someone who can help me with rental arbitrage for my house in Tampa area 

[Raymond J. Rodrigues]

@Viji Venkatachalam what's the address of your home? Any insight @Josh Green? 

[Viji Venkatachalam]

@Raymond J. Rodrigues 7715 Broad River Ave Land O Lakes 34638

[Josh Green]

Quote from @Raymond J. Rodrigues:

@Viji Venkatachalam what's the address of your home? Any insight @Josh Green? 

I don’t think arbitrage is worth it - it’s kind of like the baby step into STRs that hook people into taking all the risk and doing all the work and missing out on 2 of the 3 reasons to invest in real estate: tax benefits and appreciation.

much much better to buy and own your own STRs.  Or, from a business perspective, much better to use that time and energy to create a STR management business instead of arbitraging.