Who has air bnb rentals that they don’t own?

[Emily K.]

Hello everyone! I currently manage 3 Airbnb properties and was searching for purchasing my own Airbnb property. Because I am not financially prepared to purchasing property, It was suggested that instead of purchasing my own Airbnb property, that I could potentially rent an apartment from a landlord and rent that apartment on air bnb. This means I would pay the original landlord the monthly rent and keep additional profits for myself. Has anyone done this? How do you successfully present this to a landlord and make them feel they can trust this process? Any information and suggestions are appreciated!

[Robert Gilstrap]

@Emily K. 

@JD Martin 

Emily, don't listen to any of these naysayers; what a bunch of horse sh*t!

There is nothing, zero, nada wrong with rental arbitrage other than the old school, risk averse -   "this is the only way I know how to do it"  offering their advice saying it's "generally frowned upon". 

This is more jealousy in my opinion of "why are you able to make as much or more than me without owning anything when I've had to spend all this money buying a property".

It's taken me 50 years to realize that real estate is nothing more than a tool; an asset, to help you leverage your way to financial freedom. Don't get too cozy with it. People have real lasting value; not property.

I own more real estate than many of these guys AND I also arbitrage because it's common sense smart leverage and it's win - win. If I can control an asset and gain the upside but also avoid the downside AND make a larger profit how in the world is that "not sustainable"? I negotiate solid, long term, below market rent deals with my owners that are 100% fully disclosed and I have more of them than I can handle. The world is full of landlords looking for a safe and easy (i.e. low but consistent) return on investment. Any talk of "ethical or legal practices" or "laws changing" just expose those investors who are strictly "in the box" thinkers whose lack of risk tolerance keeps them where they are comfortable. There is nothing legally or ethically wrong with rental arbitrage; nor is it more intrinsically risky than long term rentals provided you have your contractual agreements solidly worded.

Always fully disclose to your landlords what you are doing and don't worry that they will want to compete with you because 99% won't. It's too much work and a greater capital expenditure for them. They almost always opt for "easy street"; which is a steady, reliable (even below market), low hassle,  guaranteed return vs. an unknown return that might be exponentially larger or may require more involvement and thought.  Remember Maslows hierarchy of needs: humans always seek to avoid pain 1st. Seeking pleasure comes much later. This is why most Americans stay on the sidelines and end up living a life of mediocrity.

Provide a value to the landlord.  (below market rent BUT stability + low risk + low maintenance + no/low mgmt. fees). The net to them should be greater than if they placed their property with a local mgmt company.

I just now realized I need to stand down from my soap box and stop talking but do not be dissuaded by those who would seek to squash your dreams...