How to do rental arbitrage without actually owning property: a 5-step plan to starting your Airbnb business
Introduction: What is Airbnb?
Airbnb is a web-based platform founded in August 2008 that connects people who need a place to stay with people who need to rent out extra space. Airbnb allows people to search for rental properties from a database of listings from around the world. Airbnb charges the renter a service fee, and the host can choose to pay a cleaning fee.
What is Rental Arbitrage?
Rental arbitrage is when you find a property to rent, usually below market value, and Airbnb it out at a higher nightly rate. This can be an excellent way to make money, provided you do your research and know what you’re doing. For example, if you rent a one-bedroom apartment for $1,000 per month and charge $125 per night for it on Airbnb, you would make $3,750 per month. This is a profit of $2,750 per month or $33,000 per year.
The key to successful rental arbitrage is to find a property that is underpriced relative to similar properties in the area. This can be tricky, as you don’t want to overpay for a property and end up losing money.
Here are a few tips to help you find a good deal on a property:
- Use websites like Airbnb, VRBO, and HomeAway to search for rental properties in your desired location.
- Check out listings that have been on the market for a while, as these may be more negotiable.
- Contact the owner directly and see if they are open to negotiating the price.
- Look for areas that are undergoing gentrification, as this can lead to lower prices.
Why Would Someone Want to Do Rental Arbitrage?
There are a few reasons why someone would want to do rental arbitrage:
- To make money: Obviously, the main reason people want to do rental arbitrage is to make money. And if done correctly, it can be a very profitable business venture.
- To live rent-free: Another reason people may want to do rental arbitrage is so they can live rent-free. Airbnb allows you to rent out your entire home, or just a room in your home. So if you have an extra room, you can Airbnb it and use the money you make to cover your own rent.
- To travel: Rental arbitrage can also be a great way to make money while traveling. If you’re planning on being in a certain city for a few months, why not find a cheap place to rent and Airbnb it out? This way, you can offset the cost of your own rent and even make a profit.
Rental Arbitrage Process
Now that you know what rental arbitrage is and why someone might want to do it, let’s take a look at the process involved:
1. Find a property: The first step is finding a property to rent on Airbnb. You can use websites like Airbnb, VRBO, and HomeAway to search for properties in your desired location. You can also contact the owner of the property directly to see if they are open to negotiating the price.
2. Get the property inspected: Before you finalize a deal on a property, it’s important to have it inspected by a professional. This will ensure that no major repairs or damages need to be fixed before you start renting it out.
3. Create an Airbnb listing: Once you have the property, you’ll need to create an Airbnb listing for it. This will include basic information about the property and photos and pricing information.
4. Market the property: Once your Airbnb listing is up and running, you’ll need to start marketing the property to attract renters. You can do this by posting about it on social media, email blasts, or even posting flyers in local businesses.
5. Collect payments and manage reservations: Once you start getting reservations for your property, you’ll need to start collecting payments from your renters and managing their reservations. Airbnb will give you a tool called “Hosting” which will help you with this process.
How to Find an Ideal Property for an Airbnb Rental
Airbnb allows you to search for rental properties in your desired location. You can use the “Near Me” function on Airbnb’s website to find properties that are close to you. You can also contact the owner of the property directly to see if they are open to negotiating the price.
When you’re searching for a property to rent out on Airbnb, it’s important to keep a few things in mind:
– Location: The location of the property is one of the most important factors to consider. You’ll want to make sure that it’s in a safe neighborhood and close to public transportation.
– Size: The size of the property is also important. Airbnb allows you to rent out your entire home or just a room in your home. So if you have an extra room, you can Airbnb it and use the money you make to cover your own rent.
– Amenities: Another thing to consider is the amenities that are included with the property. Does it have a kitchen? A washer and dryer? A TV? These are all things guests will be looking for when searching for a place to stay.
– Price: Of course, you’ll also want to consider the price of the property. You’ll want to make sure that you’re getting a good deal on the rent and that you’re not overpaying for the property.
Once you’ve found a property that meets all of your criteria, it’s time to move on to the next step: getting it inspected.
Get the Property Inspected
Before you finalize a deal on a property, it’s important to have it inspected by a professional. This will ensure that no major repairs or damages need to be fixed before you start renting it out.
You can hire a professional home inspector to come and inspect the property for you. They will look for any major repairs or damages that need to be fixed. Once the inspection is complete, you’ll better understand what needs to be done to get the property ready for Airbnb guests.
Create an Airbnb Listing
Once you have the property, you’ll need to create an Airbnb listing for it. This will include basic information about the property and photos and pricing information.
Airbnb provides a template that you can use to create your listing. You’ll just need to fill in the blanks with information about your property, such as the address, number of bedrooms, and number of bathrooms. You’ll also need to add photos of the property and set a price for rent.
Market the Property
Once your Airbnb listing is up and running, you’ll need to start marketing the property to attract renters. You can do this by posting about it on social media, email blasts, or even posting flyers in local businesses.
The more people who know about your Airbnb rental, the more likely you are to get reservations. So it’s important to invest time and effort in marketing your property.
Collect Payments and Manage Reservations
Once you start getting reservations for your property, you’ll need to start collecting payments from your renters and managing their reservations. Airbnb will give you a tool called “Hosting” which will help you with this process.
With Airbnb Hosting, you can collect payments, manage reservations, and communicate with guests. You can also use the tool to add extra services, such as housekeeping or airport transportation.
Following these steps, you can start your own Airbnb business without owning property. Rental arbitrage is a great way to get started in the Airbnb business without any upfront costs. So if you’re looking to get into the Airbnb business, this is a great option for you.
How to Become a Successful Airbnb Superhost
Airbnb has made it possible for anyone with an extra room to become a successful host. Whether you’re looking to make some extra money or you’re wanting to start your own Airbnb business, following these steps will help you become an awesome Airbnb host:
1. Provide a great experience for your guests: This is the most important thing you can do as an Airbnb host. Your goal should be to give your guests an amazing experience they’ll remember long after they’ve left.
2. Communicate with your guests: Communication is key when it comes to hosting. You’ll want to ensure you’re always available to answer any questions or concerns your guests may have.
3. Keep your place clean and tidy: One of the best ways to keep your guests happy is to make sure your place is always clean and tidy. No one wants to stay in a messy or unclean Airbnb.
4. Offer amenities and services: Another way to stand out from the competition is to offer amenities and services that other Airbnb hosts don’t. This could include things like a continental breakfast, airport transportation, or even laundry service.
5. Be responsive to guests’ needs: If a guest has a need, do your best to accommodate them. This could mean anything from providing extra towels to letting them check in early or check out late.
By following these tips, you’re sure to be on your way to becoming a successful Airbnb Superhost. So if you’re looking to make some extra money or start your own Airbnb business, now is the time to get started.
In Conclusion: The Ultimate 5-step plan on how to do rental arbitrage without actually owning property
The following is a 5-step plan on how to do rental arbitrage without actually owning property:
Step 1: THE RESEARCH
Find a property listed on Airbnb with a high occupancy rate. Search for similar properties in the area to ensure that there are no other properties with a higher occupancy rate. The best way to do research is by using Airbnb’s “search by map” feature.
Step 2: THE PERFECT MATCH
Airbnb’s “search by map” feature will allow you to find similar Airbnb listings in the area. This will help you to ensure that there are no other properties with a higher occupancy rate.
Step 3: COLD CONTACTING OWNERS
Contact the owner of the property and offer to take over their listing for a fee, if they have one. If a property owner is looking to sell their home but doesn’t want the hassle, they may opt to hire a real estate agent. However, this can be expensive and time consuming. To help out, you could offer to take over their listing for a fee – if they have one. For example, you could charge $1,000 for your services or offer them an agreed upon % of the final
Step 4: PERSUADING OWNERS
If they don’t have one, offer to pay them an amount per night that is higher than what they are getting from Airbnb. This will incentivize them to give you their property’s listing so you can rent it out at your own price. Airbnb is a great way to make some extra money, especially if you have a property in an area with high rental demand. But what should you do if the Airbnb you are listing your property on is not paying enough? Offer them more than what they are getting from Airbnb each night for the privilege of listing your property. It’s a win-win for everyone involved!
Step 5: START YOUR RENTAL ARBITRAGE JOURNEY
Once you get the listing, create your Airbnb account and post the property on their website as if it were yours.
Make sure to take high-quality photos and write an enticing description that will attract guests.
You can now start your rental arbitrage journey without actually owning property! By following these steps, you’ll be well on your way to becoming a successful Airbnb Superhost. So if you’re looking to make some extra money or start your own Airbnb business, now is the time to get started. If you have any questions, feel free to leave a comment below. Thanks for reading!