Biggest Drawback of Rental Arbitrage: Finding Willing Landlords

Biggest Drawback of Rental Arbitrage: Finding Willing Landlords

Member since 2026 · 3 posts · 5 votes

One of the biggest challenges with rental arbitrage isn’t running Airbnb — it’s finding property owners who will allow short-term rentals.

Most landlords are traditional investors. They prioritize predictable rent and low risk. When they hear “Airbnb,” they often think parties, damage, complaints, or regulatory issues — so the default answer is usually no.

Rental arbitrage also asks owners to do something outside their normal leasing process. They already get steady rent from long-term tenants and don’t share in the upside of your Airbnb business, while still carrying the asset risk.

Because of that, this strategy becomes a numbers and sales game. You may need to speak with 20–30 owners to find one deal that fits. That’s normal.

Bottom line: rental arbitrage works, but success depends far more on landlord conversations and risk-mitigation than on Airbnb operations.

What objections do you hear most often from owners?

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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
9mo

From am investor point of view they can just do it themselves or get an actual licensed and insured PM to protect them from any blowback and from when an Arbitrage person just walks away from properties like they did during COVID. 

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  • Mike GrudzienPro Member
    Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
    9mo

    STR arbitrage is just a job with no equity...

  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    9mo

    From am investor point of view they can just do it themselves or get an actual licensed and insured PM to protect them from any blowback and from when an Arbitrage person just walks away from properties like they did during COVID. 

  • Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
    9mo

    Don’t forget to tell them their insurance probably won’t cover them and they’ll be liable to lawsuits from tenants they didn’t approve or background check. Sure they could lose everything but helpfully they charge enough extra rent to cover that. 

  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    9mo
  • MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
    9mo

    I wouldn't say that is the biggest drawback but definitely one of them. 

  • Andrew SteffensBusiness Member
    Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
    9mo

    Definitely more drawbacks then positives...

  • Contractor · Sheboygan, WI · Member since 2016 · 921 posts · 266 votes
    9mo

    @Mike Grudzien  STVRs are a hospitality business not a RE play. 
    Arbitrage comes with different business models. A management company employing long term triple net leases on properties protects the interests of both investors looking for guaranteed cash on cash returns on passive investments and a management company looking to protect its business interests in a property.

  • Contractor · Sheboygan, WI · Member since 2016 · 921 posts · 266 votes
    9mo

    @Andrew Steffens arbitrage based on a long term triple net lease has no drawbacks. That’s why investors in commercial real estate ( STVRs can be structured the same way) looking for passive income use triple net leases on their properties over 90% of the time.

    If in doubt check out another hospitality business, hotels.

    • Andrew SteffensBusiness Member
      Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
      9mo
      Quote from @Todd Goedeke:

      @Andrew Steffens arbitrage based on a long term triple net lease has no drawbacks. That’s why investors in commercial real estate ( STVRs can be structured the same way) looking for passive income use triple net leases on their properties over 90% of the time.

      If in doubt check out another hospitality business, hotels.


       Not saying it is impossible.  I got my start in arbitrage in 2016 with a beachfront mansion in foreclosure, made $20k a month in net profit.  Never saw another deal like that in 10 years.  All that time spent looking you could put that energy into something more productive in my opinion.  There is a drawback even on triple net lease - it can still lose money.  Most owners want a personal guarantee.

  • Stuart UdisPro Member
    Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
    9mo

    I wouldn't be surprised if the only people making money from STR arbitrage are the ones selling the courses. A while back, there was a slick Instagram salesperson named Vince posting here and selling education. The units he claimed were his were actually being promoted by another social media guru.

  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    9mo

    The typical arbitrage pitch: "Hey, I have no money and no experience, and I want to use your asset to make lots of money for myself, pay you market or below market long term rental rates, wear out your property and walk away owing you thousands in rent when I don't make any money, while you deal with evicting some squatters that took over the place while I was on to the next shiney object". Yep, that makes me want to jump out of bed in the morning and get going!

    The successful arbitrage pitch: "Hey, I'm an experienced STR operator running 25 units already. There's a good opportunity in your market but no available inventory. I'm willing to pay you 10% above market rate and guarantee a 2 year term, triple net terms, with a sizable deposit and a 5% kickback on all net profits".

    You virtually never hear the second pitch. The people angling to do this don't have two nickels to rub together and they think I'm going to let them control my half a million dollar asset?

    Skyline Properties
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  • Property Manager · USA · Member since 2018 · 87 posts · 50 votes
    9mo

    I think getting your first rental is the hardest.  Once you have a few under your belt, look for an owner who has multiple dwellings and show him your current listings and offer him a tour to see the condition you maintain them!

  • Contractor · Sheboygan, WI · Member since 2016 · 921 posts · 266 votes
    9mo

    @Andrew Steffens please explain how an owner can lose money on a triple net lease property where the lease terms state the terms of the 30 year lease in terms of fixed income. 

    You don t need to search for willing property owners/ investors when using new construction if they receive fixed cash on cash payments equaling 15-16%.
    Yes, there are financial guarantors of management companies that ensure lease payments are made.

    • Andrew SteffensBusiness Member
      Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
      9mo
      Quote from @Todd Goedeke:

      @Andrew Steffens please explain how an owner can lose money on a triple net lease property where the lease terms state the terms of the 30 year lease in terms of fixed income. 

      You don t need to search for willing property owners/ investors when using new construction if they receive fixed cash on cash payments equaling 15-16%.
      Yes, there are financial guarantors of management companies that ensure lease payments are made.


      I think you are misunderstanding me from the beginning - I was not commenting from the standpoint of an owner (though there are still some drawbacks of letting someone run an STR in your property), I was talking of the standpoint of the arbitrager. Many many people come on here looking to get a start in STR by arbitrage and is fraught with risk and downside.

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