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Updated over 1 year ago on . Most recent reply

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Michael Gravallese
  • Developer
  • Boca Raton, FL
38
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49
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Short Term Artibrage on New Construction Triplex

Michael Gravallese
  • Developer
  • Boca Raton, FL
Posted

I just finished a new build. Its a Triplex consisting of (3) 2 bed 2 bath identical units, with an attached 2 car garage I plan to keep for personal use. We just put the 3 units up for rent and I have been approached by a couple of different people looking to sign a lease with me , and then rent the units out through a 3rd party management company doing short term rentals. I understand the insurance requirements needed by both the lessee, and the 3rd party management company. I am not opposed to the idea, but just wondering what else I should consider before I make a decision about this type of arrangement. Any tips, suggestions, concerns or any other advice would be appreciated. The building is in Lantana, Palm Beach County. Market rents are about $2800-$3000 per unit/month. What do you think would be a fair price to lease all 3 units to one person for an arbitrage scenario?

Thanks

Most Popular Reply

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Michael Baum
#2 Short-Term & Vacation Rental Discussions Contributor
  • Olympia, WA
6,859
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8,147
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Michael Baum
#2 Short-Term & Vacation Rental Discussions Contributor
  • Olympia, WA
Replied

Hey @Michael Gravallese. This is called arbitrage. Do a search and you will read a ton.

The bottom line is that I would want to see bank statements etc to make sure these people can afford to furnish and run it properly. Most arbitragers don't have 2 nickels to rub together.

If the market rent is $3000, I would charge them $4000 per unit. No way I would discount a single penny. I would charge a premium for allowing them to arbitrage your units.

They are going to need all the correct insurance for STRs. Not landlord or homeowners insurance.

I would make them get flood and wind as well. 

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