Is STR Arbitrage still a good opportunity?

[Anibal Mijangos]

For those doing it or who have already started, is AirBnB arbitrage still something worth pursuing? Is the opportunity still there for new people?

I used to see AirBnB arbitrage on social media a lot. At one point, I saw more of it than wholesaling. I just did a quick google search and I saw A LOT of opinions about it. Both from the property owner and the actual arbitrager. Good and bad opinions. I thought I'd better go to a source I trust more, the Bigger Pockets community.

[Ethan Cooke]

@Anibal Mijangos - Rental arbitrage is a great business wherever you can find below-market rental units and favorable STR regulations in strong Airbnb markets. It takes work but it can be lucrative. @Monica Mejia, @Christian Ehlers and @Eric Yu offer balanced perspectives here. 

I have built a successful 30+ unit rental arbitrage business between San Francisco and San Jose over 5 years. I walked away from a successul 20-year career as an HR Director in Silicon Valley to do this full fime and I have nearly replaced my corporate income. I work hard but I spend twice as much time with my daughters every day. I can increase my income when I need to by renting another unit, or increase my free time by hiring out more of the on-site property set-up and maintenance work. 

Here‘s what has made my business successful in addition to finding below-market rents in strong Airbnb markets: 1. Add value to the landlord and the unit. 1A. Find outdated units and add great rental value with paint, new light fixtures, smart locks, etc. 1B. Offer mom and pop landlords a headache-free tenancy including Free Maintenance for all minor repairs. In 5 years, I have secured leases with 30-40% of the landlords I have offered this to. 

2. If you are in an expensive market like the Bay Area, target units in cheaper (but still safe) areas. Most out of town renters don’t know the difference between Palo Alto (Stanford/expensive!) and San Bruno (SFO Airport/reasonable rents). I have kept my rental costs and risk down and margins higher by doing this. 
3. Bonus: Find homes that can be easily divided into 2 units (e.g. main house upstairs with separate downstairs area including bedroom, bathoom, wet bar and separate entrance). These places are gold mines!

Good luck!