Is airbnb arbitrage worth it?

[Matthew Newsom]

Is short/mid trem rental arbitrage profitable?

[Michael Baum]

Hey @Matthew Newsom, Sure! Nope!

That is a loaded question my man. Arbitrage can work in certain situations.

You have to find an owner who will let you do it. You will most likely pay more than market rate so take that into account.

You will then have to get it all furnished which can cost a pretty penny. Depending on the place, maybe 30k? 20k? Hard to tell without knowing the place.

Then you have to worry about changes to the regulations that could mean your place can't be rented short term. Maybe move to 30+ day rentals at that point if it can work.

There are a lot of risks. Some folks have done quite well and others have gone bankrupt.

I would do a search here and read all about it as there is a ton of info on arbitrage.

[John Underwood]

I agree with Michael. The answer is it depends.

Generally most people on here are investors and Arbitrage is just a job. It could make you money so that you could buy your first investment property.

[Gabe Chase]

Hey! We manage about 67+ units all but about 8 are STR and MTR. We have 2 arbitrage units. They are probably B- class. They are just a place to crash near the airport. Safe, clean, etc. But small apartments. I find it hard to get them to cover the rent if they don't have a multi night minimum. Usually we do about 5 nights. Anything less, I feel we are losing. But MTR in the units have been pretty good! The only thing that hurts is vacancy.

[Sarah Kensinger]

If you know what you're doing! Here's some seasoned arbitragers that can help you decide if arbitrage is the right fit.... Michael and Elizabeth Chang They also have a podcast and socials you can check out as well. 

[Gino Barbaro]

@Matthew Newsom

That's a great question. I'm sure it is rather profitable, with a very low capital commitment. I just am concerned if the regulations change, and if you are trying to b build a business, and you do not own the asset, then you can lose your whole model. It's a hard model to scale

Very similar to having a business on Youtube generating ad revenue.  Is it really a business? I guess it is, but if YouTube decides to demonetize you, you're done.

I would consider it as a compliment to what other real estate strategies I am doing.

Gino

[Garrett Brown]

Hey Matthew! Welcome to the forums!

I know some people who do fine with arbitrage, but I am personally not a fan of it. The amount of work and capital it takes is usually smarter spent on either buying your own property or venturing into co-hosting. If you can learn how to co-host properly, your risks and start-up capital are much less. 

[Andrew Steffens]

Hey Matthew

This question comes up multiple times a month and I (as well as others) have gone into some deep posts about it.  Be sure to search the forums for more depth.

Long story short, I got started in arbitrage in 2016 before it was even referred to as that.  A small mansion on the beach.  It worked beautifully.  Did it twice more once for breakeven and once for a loss, not to mention my time.  

In 2016 I could have made more money with arbitrage if I had more willing clients.  It was a tough sale.  It still is and there is even less money in it in general.  It can still work in niche situations but I think it is a grind and you gamble time and money.  I would find another hustle.

[Monica Mejia]

Hi Matthew! Speaking from my personal experience, yes. Of course this depends on a multiple factors but if you are in the right market you can totally be profitable. I worked with a DFY arbitrage program that found me an arbitrage property in Arvada CO which made me about 50k net. They negotiated the lease on my behalf and I'm not paying more than market value. I agree with most people that regulations are hard to navigate but I felt comfortable doing this in CO as I am a broker and know the regulations here like the back of my hand lol

[Henry Lazerow]

More and more cities cracking down on airbnb rules and requiring owner occupancy. Way too much risk but may work profitably in very select markets. I also see issues with airbnb fining you 50% of stay if needs to cancel due to repairs not being done fast enough. Airbnb used to just cancel a stay but as of 2024 rules have changed to be much harsher on hosts who have an issue. 

[Brian Barch]

No.

the beauty of real estate is the long term net worth impact. You don’t want to be doing arbitrage for 10 years with little to show for it

[JD Martin]

Arbitrage is not investing, it's creating a job. Depends on if you want to be an investor or a worker in real estate. 

From an owner's standpoint, there's no way in hell I would let anyone sublet any of my properties. In fact I have a clause in my leases that if I find out anyone is doing so it will immediately terminate their right to remain in the lease and they will be served notice.