Airbnb arbitrage. Do you allow it? What’s You’re experience and opinion?

Question

I listed my home for rent and was contacted by a company who is interested in Airbnb arbitrage. They agree to sign a 12 month lease and of course will Airbnb the property. For me, I don’t mind that model and I understand it. What has you experienced been for people who have done this or are currently allowing this in your properties? If I had a little more time I think I would try to run it myself but I’d like my property to be more passive and collect rent each month. What are your thoughts and experiences?

thanks, Ram

Michael Baum · Answer

I wouldn't do it myself @Ramiro Rodriguez.

I agree 100% with @Andrew Steffens for sure. Just because they have some cool letterhead and a "business" doesn't mean they aren't working outta the back of the white van...next to the speakers they sell.

I would charge a 25% premium over going LTR rates. I would require a much larger deposit than a usual LTR lease requires. Personal guarantee 100%.

The bottom line is if you are getting contacted for arbitrage, then I would seriously consider doing it yourself. Take a look on VRBO and AirBNB and see what other places are bringing that are near yours and similar.

Check out  https://www.awning.com/airbnb-estimator. Pop the address in there and see the basic figures for other units nearby.

Then go do it yourself.

Andrew Steffens · Answer

I would vet them intensely and make sure the lease is personally guaranteed.  In my opinion if there is profit to be made why don't you pay a designer to furnish it and turn it over to a property manager and cut out the arbitrager middle man?

Sarah Kensinger · Answer

Many landlords love having an arbitrager using their property for the following reasons....

So the home rents well, it's kept in perfect condition all the time.

Professionally cleaned at least 4 times a month.

So long as the property is over $150 a night, it's a proven fact that STR guests are much easier on the property the LTR tenants.

And usually because the arbitrager has spent money to furnish the property, they want to make a go of the unit. So, it's easier to get monthly rents from an arbitrager then a tenant that has nothing to lose.

It all depends on the landlord...many like their home used as a STR arbitrage unit, and others say no without truly thinking thing about it. So, it all depends on where you fall and what you think about rental arbitrage.

John Underwood · Answer

I wouldn't do it either. Too much risk.

I would use a licensed insured PM that has years of experience.

Elenis Camargo · Answer

@Ramiro Rodriguez We have experience in Airbnb arbitrage. Through our property management business, we had a single family home for rent and was contacted about renting it to use it for Airbnb arbitrage. We contacted our client/owner and asked him if he was open to it, which he was. We looked into what was required from the owners standpoint and it turned out he needed a slightly different insurance to cover the property's use for short term rental purposes, even though he wasn't the one actually renting it out. Also, we vetted the renter/Airbnb arbitrager and it turned out they were successfully doing it with about 6 other homes in FL. We verified their income from those properties and discussed their renting policies. Ultimately we decided to proceed with them and signed a 1 year lease as normal. We requested 1.5x deposit and they would cover all maintenance expenses under $500. It turned out to do very well for us and the owner, as there were no maintenance issues except for one larger issue that had to deal with old pipes. I would recommend going that route but just make sure you do your due diligence first, ask for referrals and understand their renting policy.Hope this helps!Elenis

Mike Grudzien · Answer

Michael Baum and John Underwood: as always, best advice!

Todd Goedeke · Answer

@Sarah Kensinger don t forget investors can build and triple net lease their properties via a long term lease to management companies and enjoy all the benefits of passive investing.

You are right .management companies who are responsible for taxes , insurance and maintenance, will make sure the property and furnishings( which they paid for) are well taken care of.

Chai Xiong · Answer

Just make sure you are insured

Daniel Dass · Answer

Hello all,

I am new to the forum.

what are thoughts on Air BNB Arbitrage ? I seen some courses - starting at 2k..

I am in Canada, looking to invest in Florida. Should I hire an interior designer to stage the home and air bnb the property that I invest in and hand it off to a property manager to mange the air bnb ?  Any connections of PM or Interior designers in Florida ?

looking for some guidance !

Thanks !

Airbnb arbitrage. Do you allow it? What’s You’re experience and opinion?

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