Author Topic: Rental Arbitrage w/ Airbnb?  (Read 2354 times)

jeromedawg

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Rental Arbitrage w/ Airbnb?
« on: March 27, 2018, 09:00:31 PM »
Hey all,

Just stumbled across some articles about rental arbitrage with Airbnb. Seems like an interesting concept and am wondering if anyone here has attempted or is doing it with success here...?

The general idea is to find a long-term rental unit presumably in a 'hot' market, and then sublease or Airbnb it out.

This sounds like it could be really risky too but I guess if you know for sure that you could rent the place out for at least X days per month, you'd at least break even on rent. The other aspect is the idea of putting your name down on a lease (or multiple leases) when you live elsewhere. Do you tell the landlord up front your intentions of subleasing and even Airbnbing? If I were a landlord, it would seem really strange to me that some dude (or dudette) wants to rent from me with the immediate intention of subletting. And if I knew he were planning to Airbnb or I found out, I don't know how willing I'd be to do that... especially hearing, in general, about how the 'wear and tear' with Airbnbs can be higher versus rentals.

It just seems pretty complicated just from reading up on the idea and considering all the things that could go wrong. But maybe there's something else I'm missing or not considering?

 
« Last Edit: March 27, 2018, 09:02:02 PM by jeromedawg »

Freedomin5

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Re: Rental Arbitrage w/ Airbnb?
« Reply #1 on: March 28, 2018, 07:32:10 AM »
Yes, Iíve heard of it, and as a landlord myself, Iíd be very angry if I rented to you only to have you turn around and rent it out to a bunch of random strangers, especially without my knowledge.

1. I rented to You. I did my due diligence and ran background checks on you before I decided to allow you to live on my property. 
2. In condos, in our area, Air BnBs are illegal per condo bylaws because thereís no way of knowing who youíre letting into the condo building.
3. The rental contract specifies exactly who will be living in the unit. If you put your name down and turn it into an AirBnB, you are in breach of contract and I will evict/sue you, whatever is more appropriate.

However, if you were upfront about your intentions, and you arenít breaking any laws, then sure...go for it. I think I read an article about someone in SF who did it with four rental units.

afox

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Re: Rental Arbitrage w/ Airbnb?
« Reply #2 on: March 28, 2018, 10:15:33 AM »
the HO insurance requirements are different for long term rental than for airbnb

px4shooter

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Re: Rental Arbitrage w/ Airbnb?
« Reply #3 on: March 30, 2018, 08:31:58 PM »
And the local regulation may prohibit the Air BnB market too. Nothing like getting nailed for a criminal case and/or civil fines for violating the local laws.

lhamo

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Re: Rental Arbitrage w/ Airbnb?
« Reply #4 on: March 30, 2018, 08:39:45 PM »
The terms of the last two rentals I had in Seattle were explicit -- no subletting.  Only individuals named on the lease (me and my immediate family members) could reside there.  No guests longer than 2 weeks without permission.   Both of my landladies were cool, and would have been fine with me having housesitters when we were gone to China, but we didn't need them.   But they definitely would NOT have been ok with me running a rental sublet out of their properties.

You might sneak this by an inexperienced landlord, but once they found out they would probably be unhappy with you and not renew with you.

Goldielocks

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Re: Rental Arbitrage w/ Airbnb?
« Reply #5 on: March 30, 2018, 08:42:09 PM »
Why would you not just sign up to be a host -- the person that helps landlords rent their units and get paid directly?

jwright

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Re: Rental Arbitrage w/ Airbnb?
« Reply #6 on: April 02, 2018, 08:23:39 AM »
We discovered a tenant was doing this without our knowledge at one of the rental units we manage through work.  The address was not properly zoned for short term rentals so now, two years later, we are still dealing with fines and a lawsuit from the neighbors.  Had we discovered this early in the lease we would have evicted as it is a violation of the terms, but we just ended up asking him to take the listing down and pay the remaining month's rent and did not offer renewal.

All that said, if this arrangement is legal and allowed in your lease, that's a great money maker.  You get the income from short term rental without having to invest in property.  As someone else said, you might sneak it past an inexperienced landlord, but that would be the last time the landlord made that mistake.