I've been considering rental airbnb arbitrage for quite some time now. I've been doing the market research and narrowing down my search. However, every time i look into a city with what i think is potentially a good market, I tend to come across an issue of finding owners that will allow for arbitrage.
1. There aren't that many "listed by owners" 2. Agents tend to be uninterested in passing on the word the moment they hear corporate rentals, STR, or airbnb 3. Management companies run a lot of the listing in certain markets (ex. Kissimmee FL) and can't get in contact with owners at all.
Has anyone else have had this issue or know a work around for this?
Still learning a lot of the steps, but really determined to get at least one property off the ground this time! Any word of advice will be helpful! Thank you!
The bottom line is a lot of complexes don't allow STRs. People don't want to get involved with an arbitrage situation. It is fraught with issues if things go south.
Most arbitrage folks don't have much in the way of down payment to buy a place so they try arbitrage. The problem is they don't have any cash to outfit the property correctly, take care of a major repairs and maintenance etc.
A lot of owners know this so they simple avoid the situation. It is a tough row to hoe.
The bottom line is a lot of complexes don't allow STRs. People don't want to get involved with an arbitrage situation. It is fraught with issues if things go south.
Most arbitrage folks don't have much in the way of down payment to buy a place so they try arbitrage. The problem is they don't have any cash to outfit the property correctly, take care of a major repairs and maintenance etc.
A lot of owners know this so they simple avoid the situation. It is a tough row to hoe.
The bottom line is a lot of complexes don't allow STRs. People don't want to get involved with an arbitrage situation. It is fraught with issues if things go south.
Most arbitrage folks don't have much in the way of down payment to buy a place so they try arbitrage. The problem is they don't have any cash to outfit the property correctly, take care of a major repairs and maintenance etc.
A lot of owners know this so they simple avoid the situation. It is a tough row to hoe.
Thanks Michael, It has been pretty tough. Totally understand the risk that the landlords see that doesn't seem to be worth it. If given the chance, i'd share the money i have for the business which is often time more than enough to cover the full year, get the place ready, market, and maintain the property. However, to your point, that chance does not come often :T
I recommend networking with real estate investors in the market you want to do rental arbitrage. Your goal would to be to get to know owners and their challenges with being a landlord. Then you can find ways to provide solutions to their challenges by renting from them and re-renting as a STR. For example, if a landlord is tired of dealing with tenant issues or maintenance, you can offer to pay them their rent and take the tenant and maintenance issues off their hands. Like any business deal, you have to learn what their needs, wants, and pain points are and position yourself as a solution to those challenges. Otherwise why would a landlord choose to work with you versus rent to someone else?
Why not become a real property manager and do it that way?
Are you saying it'll be a more hands-on opportunity to start a property management company? Gather the skills and cash to purchase the property and then get into STR?
Why not become a real property manager and do it that way?
Are you saying it'll be a more hands-on opportunity to start a property management company? Gather the skills and cash to purchase the property and then get into STR?
Yeah, I think that saving cash to buy the property is the way to go.
If you have never managed a STR you don't really have the skillset to start managing.
Maybe you could start doing a co-host with someone first.
We have a property in Long Beach, CA all furnished and ready to go for STR. We are looking for some good company who wants to do rental arbitrage.
Hi Shefali. this is exactly what my partner and I were talking about today. Can we connect? We are local and not far away from Long Beach, and we all have experience running several STR and MTR.
As a landlord in central FL I can tell you that your issue is supply and demand. Florida is booming and there just isn't the vacancy that would warrant allowing a STR. I have tenants that haven't moved because of the lack of options and cost of renting. The last time I had an empty rental, I had 3 realtors and 10 inquiries within a week. It just isn't a good time for that strategy in my opinion.
Why not become a real property manager and do it that way?
Are you saying it'll be a more hands-on opportunity to start a property management company? Gather the skills and cash to purchase the property and then get into STR?
Yeah, I think that saving cash to buy the property is the way to go.
If you have never managed a STR you don't really have the skillset to start managing.
Maybe you could start doing a co-host with someone first.
I see! Yes I have experience in Hospitality business in my former life for which i am hoping will come in handy running STR! I will consider co-hosting first maybe. Thank you!
As a landlord in central FL I can tell you that your issue is supply and demand. Florida is booming and there just isn't the vacancy that would warrant allowing a STR. I have tenants that haven't moved because of the lack of options and cost of renting. The last time I had an empty rental, I had 3 realtors and 10 inquiries within a week. It just isn't a good time for that strategy in my opinion.
Thank you Melissa! I see. yeah Central Florida seems like it's always in high demand - I originally looked there because I grew up in central Florida - but it just seems so hard with demand and also with a lot of the homes being in a gated community with strict HOA restrictions.
You may be right, it may not be the right time to do so or for Florida, I may have to really just consider purchasing a home instead.
I’m an owner in nw Florida. I have had many operators contact me on my rentals. They pitches vary from good to terrible, but the bottom line is no added benefit for me. They offer the exact amount I will get from a long term tenant, but I lose control of who I place in the house.
Hey @Ji Hong, I don't have a solution, but I will note that I am running into the same issue. I am interested to hear other's advice.
I am build to rent developer and I love working with folks that want to do arbitrage. We both enjoy the profit sharing. If anyone is looking to do an arbitrage near downtown San Antonio currently, I just completed a set of 2 identical townhomes with full privacy backyard and 1 car enclosed garage.
Hi Naz, how are you? My name is Chantel and I am very interested in rental arbitrage. If you could I would love to ask to speak with you, if you don't mind. I have some questions and maybe you can help me out with some tips possibly. Thank you in advance