Reverse STR or Airbnb Arbitrage

Reverse STR or Airbnb Arbitrage

Member since 2023 · 11 posts · 17 votes

Is anyone doing something like Reverse STR / AirBnB Arbitrage..

I don't know if this has an actual name already but I just called it that. Basically, you purchase a rental for consistent long term rental cash flow. You buy in a STR market so it could be used as that as well but for whatever reason, you are not interested in STR. Has anyone got in contact with someone who is doing AirBnB aribitrage and connect them with your property so you are subleasing to them getting consistent cash flow and they use it as a STR.

Pros:

- Less vacancy rates, the subleaser in a way acts like a property manager for day to day stuff so you may be able to reduce overhead/expenses.

- They will furnish your unit so in the future if you want to do the STR yourself, you can purchase the furniture from them, you will have data that it works, etc

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  • Luke CarlPro Member
    Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
    3y

    Or just put it with a property manager? 

  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    3y
    Quote from @Jay A.:

    Is anyone doing something like Reverse STR / AirBnB Arbitrage..

    I don't know if this has an actual name already but I just called it that. Basically, you purchase a rental for consistent long term rental cash flow. You buy in a STR market so it could be used as that as well but for whatever reason, you are not interested in STR. Has anyone got in contact with someone who is doing AirBnB aribitrage and connect them with your property so you are subleasing to them getting consistent cash flow and they use it as a STR.

    Pros:

    - Less vacancy rates, the subleaser in a way acts like a property manager for day to day stuff so you may be able to reduce overhead/expenses.

    - They will furnish your unit so in the future if you want to do the STR yourself, you can purchase the furniture from them, you will have data that it works, etc


     There are many Cons also that have been posted on here previously.

  • Member since 2023 · 11 posts · 17 votes
    3y
    Quote from @Luke Carl:

    Or just put it with a property manager? 


    Right, of course that is always an option for a LTR

    However, I was curious to see if this method would allow for any significant benefits such as consistent tenant (the subleaser) with good history. Potentially higher rents as the subleaser will be making profits from the STR prices, you may be able to charge slightly higher rent? Potentially dec expenses as majority of day to day stuff would be managed by the subleaser.

    I am sure there are cons as well, but I wanted to see if anyone is doing this successfully or if this is worth considering based on the pros

  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    Hey @Jay A., if you do a search you will see all the issues with arbitrage.

    For me, there are no pro's. I am sure there are some folks allowing arbitrage in their places, but they are far and few between on the forum.

    What @Luke Carl means, I think, is to just STR the property yourself and use a PM. Profits are small, but there you go.

    A lot of this will depend on where you want to do this. 

  • Sarah KensingerPro Member
    Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
    3y

    There are SO many opportunities with this strategy if you're willing to think outside the norm! It's not one that we have done since we prefer the co-hosting method, but lots of people that have educated themselves have been able to purchase a lot of real estate by utilizing the rental arbitrage method. If you want more info check out Michael and Elizabeth Chang!

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