Arbitrage... the right way

[Ken Latchers]

you buy an investment property with 15 year inv mortgage with 20% down. Your analysis shows that you could reasonably gross $1,000 a month long-term. You could gross 2200 a month short-term. In other words, owning a property and deciding to short-term rent rather than long-term rent is also Arbitrage.

if you decide to short-term rent, the ARB is excess over the long-term rent. If you are wrong or change your mind, your back-up plan is a long-term rent.

in either case, you projected in 15 years the value of the property should double.

in either case, you have gained the 80% equity by paying off the mortgage.

if you would done the popular arbitrage the newbies keep trying to pursue here, you would have no equity and no property increase and no back-up plan and all the short-term risks coming down the pike. You would not be depreciating the property over time.

your monthly mortgage payment in many areas is considerably less then the rent the arbitrageur is paying to the owner. Your monthly mortgage payment is fixed taking advantage of historically  lower interest rates. For the arbitrageur, who is paying increased rent many years.