Landlords: Your Take on Rental Arbitrage in Short-Term Rentals?

[Sam Hoffer]

For many folks new to the world of short-term rental hosting, getting their hands on a property can be quite the challenge. You've probably come across some "Airbnb Gurus" who like to talk about rental arbitration. Basically, they suggest leasing a property for the long term and then renting it out on a short-term basis to travelers, tourists, or even friends. The perks are clear: you get to set the prices nightly, it's a smaller upfront investment, and you can turn a profit relatively quickly.

Of course, this only works if it's in line with local rules and short-term rentals are allowed in your area. And, there's a bunch of advice out there to help you convince your landlord to give it a shot. Things like taking charge of all guest interactions and promising to cover any damage expenses for them.

Now, here's the real question: If you're a property owner, how would you really feel about this? Would you be open to the idea of your tenant doing this? What would make you say 'yes' to this kind of arrangement? And what are the things that would make you hesitate? Your thoughts and experiences here would be super helpful, so please share!

[Nathan Gesner]

Quote from @Sarah Kensinger:

Talk about the "rich" taking advantage of the "little guy"! 

Wait. If I save up money and buy an investment property, I'm "the rich guy" taking advantage of "the little guy" because I won't let him use my property to produce a profit for him? That sounds like something Marx would say.

Arbitrage is a bad idea for Landlords. They lost control of who rents their home. They hand it over to a renter who's only interest is in making easy money using someone else's investment. You have no idea if they will obey the law, pay taxes, treat people well, carry the proper insurance, etc. When the cash flow dries up, they will pull stakes and move on to the next get-rich-quick scheme and leave the Landlord hanging. 

Great idea for the get-rich-quick crowd. Bad idea for the Landlord that has worked hard to save money and invest in a property the right way.