The beauty of rental arbitrage is that investors do not need to own real estate to get started and can simply be vacation rentals.
Many potential short-term rental property owners, on the other hand, are doubtful of the Airbnb arbitrage business’s true viability. But, like with any other endeavor, there are always hazards in business.
So is it beneficial to participate in short-term rental arbitrage? What are the first steps you should take? Where do you even begin your search for a rental property?
But before all that…
Rental Arbitrage is a real estate investing program.
Like most real estate investing training courses, you’ll likely be exposed to the “Big 3” investing types:
- 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
- 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.
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 Rental Arbitrage?
The practice of renting out long-term houses and then re-renting them to others on a short-term basis via short-term rental platforms such as Airbnb or HomeAway is known as rental arbitrage.
Contrary to popular belief, HomeAway and Airbnb arbitrages are legitimate enterprises and vacation rental platforms as long as you respect local regulations and responsibility requirements.
Essentially, rental arbitrage is a means for individuals to start generating passive earnings via real estate without really owning property and to run an STR business without actually owning property.
Doing Rental Arbitrage Business Vs. Doing Rental Property Ownership
STR property investors may either buy their own property or begin renting arbitrage for their company.
Both techniques have benefits and drawbacks, but rental arbitrage seems to be more popular among those looking for good income flow.
Here’s a closer look at the differences between owning real estate and participating in rental arbitrage for a STR company:
- It is not required to own property.
- It delivers a steady stream of passive income.
- There are no real estate taxes.
- There is no need to insure appliances.
- Allows for small incremental growth and monthly reinvestment of earnings.
- Allows for the possibility of terminating the lease early – lesser commitment involved.
- Needs security deposit.
- Automatically screens problematic tenants.
- On the property, a 20% down payment is needed.
- Taxes, HOA fees, and utilities must all be paid.
- It might take a year or more to repay the first investment and buy a second house.
- Requires a substantial financial commitment to a mortgage
- Appreciation of property value.
How Much Does It Cost To Start A Rental Arbitrage Business?
A short-term rental arbitrage company will need a minimum of $5,000 to $10,000 in start-up costs. Leasing costs, furniture, décor, bedding, and kitchenware, as well as company formation and listing images, will be covered.
Nonetheless, one of the most appealing characteristics of short-term rental arbitrage is that no property is needed to be purchased.
This means you won’t need to save a large sum of money for a down payment and closing fees to start a rental arbitrage business.
Airbnb Rental Arbitrage Business: How To Get Started Without Owning Property
While there are numerous stages to launching an Airbnb company, here is a basic checklist of steps to get you started:
Look For An Ideal Airbnb Arbitrage Location
The most practical and viable option for a first-time Airbnb rental arbitrage company owner is to start searching for rental homes in your area.
If you live close to the property, you may solve guest or property issues in real time and more effectively.
However, it is not advisable to restrict your business to the neighborhood in which you presently reside since the possibilities are limitless for Airbnb income.
Keep In Mind The Main Objective Of Rental Arbitrage Business!
Remember that the primary goal is to choose a location with the highest profit margin and the biggest difference between the short-term rental price (bid) and the quantity of short-term rental revenue.
Let’s put this into perspective with a more realistic vacation rental situation. If you want to start a rental arbitrage company and live in London, UK, look for profitable places within a 3-hour drive of the city.
Here Are Some Of The Many Techniques Used By Airbnb Arbitrage Hosts:
- Making contact with local property managers in their area
- Participating in Airbnb host communities through social media
- Asking inquiries in the BiggerPockets real estate forum.
- Scanning individual Airbnb listings for various locations manually
Whatever technique or a mix of strategies you select, bear in mind that every business and host is unique. Despite their same location, one host may operate their business differently from another host in the same area, resulting in a higher profit.
Identify A Specialized Need In Your Market
Every place offers opportunities. You only need to locate the one-of-a-kind market segment with low supply and high demand. You have more options since you are renting rather than owning a home.
Here are a few things to think about.
- Which niche do you wish to specialize in?
- What kind of property are you looking for?
- How many bedrooms do you want to buy?
- What is the maximum number of persons you wish to accommodate?
- What sort of facilities do you want?
Ensure Compliance With Real Estate Legislation And Requirements
Depending on the area, the STR company is subject to a number of rules and regulations affecting Airbnb arbitrage. Apply for any rental arbitrage licenses that may be required in your target location.
For a more extensive list of legal and regulatory considerations to consider before hosting on Airbnb, go to Airbnb’s official website.
Establish Your Reputation To Solidify Your Position To Secure Property Owners
Before you begin crafting your pitch to property owners, consider the following:
- Maintain a good credit score.
- Make a sufficient financial investment.
- Prepare some references.
- Agree to cover minor maintenance problems up to a certain amount.
- You must provide your own liability insurance
- All of these ideas will help you address some of the property owner’s worries or problems with your rental arbitrage presentation/offer.
Provide Furnishings For The Property
This is where you should spend the most of your money since high-quality design and furnishings will appeal to a broad spectrum of guests.
Spend a few thousand dollars on necessities like a sofa, a high-quality mattress and bedframe, great pillows, cooking utensils, towels, and so on.
How To Make A Proposal To Property Owners
Property owners come in a variety of shapes and sizes, from single-family homes to multi-family complexes and even whole apartment buildings.
The key to pitching to different property owners is to thoroughly examine each one’s needs.
As a first-time STR company owner, try not to concentrate on YOUR needs.
The entire purpose of presenting to property owners is to concentrate on what their current or future requirements are and how your business can help them.
Is Rental Arbitrage A Scam?
So, is Rental Arbitrage a scam? Not technically. You can make money with this program, but it’s definitely not as easy as Rental Arbitrage makes 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
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 Rental Arbitrage?
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?
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.
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.
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.
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.
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.
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.
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.
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.