Rental Arbitrage Business Review (2022 Update): Airbnb Rental Arbitrage

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Updated: April 08

By: Scam Risk - Expert Reviewer

Airbnb Rental Arbitrage Business Review

Table of Contents

Pros: What I Liked

  • No need to own a property
  • Little upfront investment needed
  • You can scale fast
The Good

Cons: What I Didn't Like

  • Not truly a pandemic-proof business
  • Exposed to property damage risks
  • Need legality and permission
The Bad

Airbnb rental arbitrage is one option for real estate investors to start their portfolios.

Real estate investors will want to seize this opportunity as vacation rentals and home-sharing grow more popular among tourists and business travelers. But what if you can’t afford to purchase a home or apartment only to offer it on Airbnb?

The solution is to use Airbnb rental arbitrage. This article will teach you all you need to know about rental arbitrage.

Rental Arbitrage is a real estate investing business.

Like most real estate investing business, you’ll likely be exposed to the “Big 3” investing types:

  • Flipping
  • Wholesaling
  • Long-term buy-and-hold

Regardless of which path you go down, there is a lot of potential with real estate investing.

After all, it’s the world’s oldest wealth-builder.

However, before you leave this Rental Arbitrage review and go sign up, you might want to ask yourself:

“Is now the right time for me to get into real estate investing?”

Because, no matter which way you slice it, real estate investing is extremely capital intensive, labor intensive, or both.

So if you’ve only got an hour or two a day, or your savings account is a few zeroes lighter than you’re comfortable with, this might not be the best time for you to jump into real estate investing.

But that doesn’t mean you’re out of luck. It just means you need a system to free up more time and give yourself a stronger financial cushion.

A good way to get yourself there is with Digital Real Estate.

Digital Real Estate takes all the best parts of real estate investing, while eliminating most of the headaches:

  • Low cashflow
  • Interest payments
  • Mortgages
  • High overhead
  • Expensive repairs and maintenance
  • Problematic tenants

And the best part?

Digital Real Estate allows you to build a passive income stream that’s actually passive!

An income stream that brings in consistent revenues every single month (from a couple thousand dollars to well over $10,000).

An income stream you could actually build in your spare time, and grow as large or as small as you want to, without having to spend hours a day analyzing deals, cold-calling homeowners, or dealing with contractors.

TESTIMONIAL - STILL GETTING PAID

If that sounds like something you’d be interested in, check out Digital Real Estate.

This is the perfect first step to build recurring income that you can then use to start investing in real estate down the line.

However, if you’d still like to know more about Rental Arbitrage, keep reading.

What Is Airbnb Arbitrage?

hat Is Airbnb Arbitrage

Airbnb rental arbitrage is the process of renting out a house or property and then subletting them to short-term rental market services such as Airbnb. Homeownership has grown increasingly difficult to obtain as house prices climb and income stagnates.

This is an excellent first step for those who wish to begin investing in real estate but cannot afford to purchase a home. In fact, you may utilize this approach to save money for your first home.

Here’s an illustration of how the rental arbitrage model works: You pay $1,000 per month for a one-bedroom apartment in Hawaii. If you leased that property on Airbnb for a month at $140 per night, you’d be able to pay off your rent in eight days. You would have made $3,920 if you were able to host visitors for 28 days that month.

After subtracting your rent, you have a profit of $2,920. Even after deducting your property maintenance costs, you should be able to save and increase your income without owning the property.

This may seem too good to be true, yet many property investors have successfully utilized this strategy. But, before you dive in, you must first clear some hurdles.

Is It Legal To Do Airbnb Rental Arbitrage?

Is It Legal To Do Airbnb Rental Arbitrage

Is Airbnb rental arbitrage legal?

The legality of setting up an Airbnb rental arbitrage depends on where you want to rent and sublease. Many local laws and HOA bylaws have limitations surrounding short-term rentals, so be sure you are permitted to do so in your area before proceeding to the next step.

And, if it is legal, you must determine if you need to apply for a specific license or permission to operate as a short term rental business.

You must speak with your landlord after determining that short-term and holiday rentals are permissible in the region where you intend to conduct business. This is perhaps the most difficult stage for most people, but it is also crucial. You put yourself in risk of eviction if you rent out to visitors behind your landlord’s back.

If they agree, you must write a new lease with your landlord. Check also if you can have a long term lease. You should also ensure that you are protected and insured in the event of damage caused by your visitors or natural calamities. Airbnb provides Host Protection Insurance, but you should also look into short-term insurance for short term rental arbitrage.

How To Run A Successful Airbnb Rental Arbitrage Business

How To Run A Successful Airbnb Rental Arbitrage Business

When your landlord agrees, it is time to set up your first rental. The following are the next steps:

Determine Your Starting Costs

Any rental property investment requires an initial outlay of funds. Even if you do not need to purchase a house or apartment to rent out, you must account for the following expenses to determine how much you must earn back:

Any permission or license required to operate requires an application fee.

  • Deposit (a security deposit, the first and final month’s rent, etc.)
  • Insurance
  • Legal expenses
  • Property maintenance
  • Furnishings and décor
  • Wi-Fi
  • Subscriptions to entertainment services (such as Netflix, Amazon Prime, and Disney+)
  • Cleaning service
  • Utilities
  • Kitchenware and toiletries

In addition to estimating these expenditures, you should put aside emergency money in case you get fewer reservations than expected in the first six months.

Prepare Your Rental Unit

When you are confident in your financial situation, it is time to furnish and decorate the apartment. Having a tidy flat isn’t enough when it comes to holiday rentals. You may wish to contact an interior designer unless you have an excellent eye for design.

It would also be beneficial to have facilities in your Airbnb business such as laundry and dryer, a TV, a crib, a dishwasher, a coffee maker, and free parking. Some visitors believe these to be must-haves when searching for a location to stay.

Rental Arbitrage On Airbnb

List Your Property

It is important to publicize your apartment once it is ready for rent. Although we have been referring to short-term rentals as “Airbnb,” it is not the only booking platform available. You may also advertise your home on other vacation rental platforms like Vrbo, Booking.com, HomeToGo, TripAdvisor, and others.

However, if you use a multi-channel distribution plan, you will want an automated platform to increase your marketing and avoid duplicate reservations. When your occupancy rate reaches 90%, you may raise your rate.

Continue To Optimize Your Listing

Managing an Airbnb isn’t as simple as listing and forgetting. If you are still looking for your first booking, you must ensure that your home appears in search results.

Take excellent images of the property and highlight the things that customers are searching for. Try checking out one variable every week to see which parts of your listing work and which aren’t.

Is Rental Arbitrage A Scam?

So, is Rental Arbitrage a scam? Not technically. You can make money with this business, but it’s definitely not as easy as people make it sound.

There’s a ton of work to be done upfront, no real guarantee of success, and – most importantly – the actual profit margins on real estate investments are pretty small.

Now, there’s nothing wrong with front-loading the work and making the money later.

But if you’re grinding it out for 3 months – looking at deals, sending out offers, negotiating with the seller and lender to buy a rental property – and then your reward is like $100 a month in profits, it’s not really worth it.

What if, instead, you could do that same 3 months of work (in your spare time), and your reward was a $500 to $2,000 payment that came in every single month (with a 90-95% profit margin)?

And what if you actually didn’t need to wait 3 months? What if you could get started today and have your first payment in a week?

And what if you could double it next week?

Well, that’s the power of Digital Real Estate

And, unlike traditional real estate, you can legitimately do this from anywhere. It’s a true lifestyle business.

Your laptop and an internet connection is all you need.

Some of the most successful students in this program run their entire 6-figure businesses from:

  • A camper in the middle of the woods
  • A beach chair on the water in Mexico
  • A small villa in Greece

TESTIMONIAL - SAYING GOODBYE TO OUR JOBS

They’re able to travel around, living their lives first, and focusing on their income second.

Because even if they stop working for an extended period of time, the money keeps coming in.

So adventure, memories, and experience are the top priority.

And they never have to worry about how to pay for the next trip, or consider asking for time off.

If this sounds more like the type of life you want to lead, just click here to find out more about Digital Real Estate.

Are There Alternatives To Airbnb Arbitrage Business?

alternatives

Yes, there are plenty of other business models to choose from if you want to pursue this making money online.  Here are just a few:

What Is My Top Recommendation In Making Money Online In 2022?

Digital Real Estate

Our review team has spent months researching, reviewing, and vetting dozens of business models and thousands of programs.

While there may be no “perfect business”, the research IS conclusive:

Digital Real Estate is the #1 online business model for those just starting out.

Whether you’ve never made a dollar online, or you’ve been in this space for a while but never really “made it,” Digital Real Estate is for you.

Why?
1) It’s Flexible: got an hour a day? You can do this. Ready to drop everything else and dive in full time? You can do this. Yes, the more time you put in, the faster you see results. But even with a little time each day, you can move the needle in a Digital Real Estate business.

And because this system is so flexible, you don’t have to constantly be working to make more money. It’s called PASSIVE INCOME because if you stop working, the money doesn’t.

Imagine taking 3 months off to just tour around Europe, rent a cabin in the woods to write a book, hike the Appalachian Trail, or live on the beach and surf all day.

This is only possible if you have an income stream that’s not tied to your time.
Flipping and wholesaling are full-time jobs (and more), no matter what any real estate guru tells you. You always have to be searching for deals, because if you stop, so does the money.

TESTIMONIAL - JUMP ALL IN

2) You Own & Control EVERYTHING: Yes, in traditional real estate you kind of “own” the properties. But there’s also a ton of debt tied to most real estate investments, which means the property isn’t truly yours.

A lender can take it away if you miss a payment. Not to mention, loan payments really impact your profit margins.

With Digital Real Estate, you own the assets outright (with a 90-95% profit margin), which means you have all the power and all the control.

TESTIMONIAL - FEELING BLESSED

3) Little To No Startup Costs: It’s possible to get into Digital Real Estate with zero dollars upfront. Because, using the strategies outlined in this program, you can get a client to pay you BEFORE spending a penny out of your own pocket…even before you do any work.

Even without getting paid in advance, you can have your first Digital Rental Property up, running, and generating profits for less than $100.

TESTIMONIAL - SCOTT LEAD GEN

4) Minimal Ongoing Expenses: With traditional real estate, monthly expenses are HIGH. Between loan payments, ongoing maintenance, and repairs (not to mention the possibility of having to go through the eviction process), profit margins are slim.
Plus, whenever you have a vacancy, factor in the costs to turn over a unit (plus the fact there’s no money coming in until the next tenant moves in).

With Digital Real Estate, a 100% online business with minimal maintenance and ongoing costs, you never even have to think about that risk.

TESTIMONIAL - ANNA DONE DEAL

5) Easy To Duplicate: Ok, here’s the best part: once you have your first Digital Rental Property up and running, you can literally DOUBLE your income with a few clicks, a couple keystrokes, and a single phone call (and you don’t actually need the phone call).

Remember: each Digital Rental Property is worth $500 to $2,000 a month in semi-passive income (over 95% profit). Every time you decide to create another one and increase your income, it gets easier.

Because you have more knowledge, more experience, more results, and more momentum.

If you wanted to double your income with traditional real estate investing, you’d have to double your monthly rent, double your deals/number of units OR double your profit margins. And, guaranteed that’s a lot harder than a few clicks and a few minutes of your life.

TESTIMONIAL - LANCE LEAD GEN

6) Make Money Helping Real People: This part is what makes it all worth it. With Digital Real Estate, you’re actually helping people by solving your clients’ biggest problem:

Small, local businesses need more customers, and with Digital Real Estate, you are unleashing a flood of happy, paying customers for these businesses.

You make money by helping them make money.

Not a big, faceless corporation either…a small business owner who’s using that money to put food on the table for their family, start a college fund for their kids, or take care of a sick parent.

Once you see how Digital Real Estate makes a real impact in the lives of real people, you’ll sleep like a baby with a big smile on your face.

TESTIMONIAL - BOSS OF MY FUTURE

Now, the choice is yours. You could continue browsing, looking at opportunities like Rental Arbitrage which could one day make you money.

You could continue researching, never making a decision.

OR, you could take a look inside, consider what you really want, and join a program that makes your dreams a reality. At the same time, joining a community of over 2,000 successful students that are living life on their own terms thanks to Digital Real Estate.

A consistent, reliable, semi-passive stream of income that doesn’t depend on you or your time to keep producing profits.

All while genuinely helping real people who are grateful and happy to pay for it.

If this sounds more like what you want out of life (or if you just want some nice side income), click here to learn more about Digital Real Estate.

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