25 Jan Ask Sam: What is Airbnb Rental Arbitrage and How Does It Work?
What is Airbnb Rental Arbitrage
I have been blogging about rental arbitrage for a while now. People get excited when I talk about it because this type of business doesn’t require a genius to operate. This is a profitable business that requires consistency and sense of upward mobility.
To be honest, I was skeptical at first. But so are you? It’s part of our human nature to be skeptical of things, people, and ideas. I was able to find success early on and able to replicate it again and again.
Everything I talk about in this blog comes from my first-hand experience of managing this business. So, what’s Airbnb rental arbitrage?
Airbnb Arbitrage happens when you rent a property on Airbnb several times the cost of leasing the unit monthly. For Example, Your month-by-month lease of the unit is $1000, and your rent profit of that unit via Airbnb is $3000 for that month.
Of course, that number is made up and actual numbers will vary. However, the concept is explained in that example. You buy low and sell high.
When I tell people about my business, they often get confused for two reasons.
- Assume that I bought all of the properties.
- They overestimate how much work it would take to start a business just like mine.
Typically, if you wanted to invest in rental properties, you better have at least 20% to invest in a down payment. To make the math simple, you see a multi-family unit on sale for $500,000 dollars in a desirable rental area, you would need $100k in your bank in order to qualify for a $400,000 dollars mortgage.
That’s not all!
Once you put down your $100,000 investment, you will still have to pay for mortgage payments, property taxes, insurance, and maintenance fees.
That sounds like a lot of work for just one property. What if you want to have multiple units?
As you can see, this method does not scale very well. Instead, you can put that initial $100k into multiple units that will generate multiple income streams and spread your risks more evenly across your units.
It is much better than investing in rental properties.
The principle of Airbnb rental arbitrage is not only simple and easy to implement, it is also a much better way of making money through rental income. If you go the traditional route, you would be investing a huge sum of money as down payment.
Passive Airbnb is what I call the NEW and SMART passive income.
What is different about this blog?
The other most popular Airbnb blogs show you tips and tricks on how to run an existing Airbnb property. They do not show you how to create one from scratch.
My goal is a simple one.
It is to show you my process of creating a 6-figure income and what it takes to achieve that. I have spent thousands of dollars on courses and perfecting it along the way to create this blog.
It is to help you to generate a passive income stream without having a large sum of capital.
If you are interested to know more about me, you can read it here.
The best thing about rental arbitrage is that you do not need to own a home in order to profit from this type of Airbnb hosting business. Airbnb rental arbitrage is one of the most consistent ways to make money as it produces passive income for you without investing a large capital.
In my e-course, I’ll teach you only the most important things like:
- how to find the most profitable area FAST
- how to talk to landlords so they are willing to let you sublet their properties on Airbnb
- how to automate 90% of the work so it can be on auto-pilot
I have over 500+ members in my exclusive Facebook group. This is a community of entrepreneurs just like you. The goal of this group was to create a real-time feedback loop from other students. How many times have you felt stuck and wanted to see if there are other people experiencing the same challenge?
Well, now there’s a group for that. You can request access once you joined my mailing list.
Also, I’m now offering a mini-lesson course. Sign up now and receive 5 mini-lessons to get you started. This training is absolutely FREE. Click Here to learn more about how you can leverage other people’s properties to build a 6-figure business on Airbnb.