Airbnb Rental Arbitrage in 2020: Where to Make Money Without Buying Property Dillon DuBois | Februar
Updated: Feb 19, 2020
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Since the 2009 recession, homeownership in the United States has, for many, felt more like a pipe dream than any feasible part of the American dream. A 2019 report from ATTOM Data Solutions has confirmed that this sentiment is no longer a hunch — it’s written in the data. Becoming a homeowner is now more difficult than it has ever been, making rental arbitrage now extremely appealing.Here’s where we stand: throughout the country, home prices are outpacing wages in 80% of the 755 counties analyzed. Renting a home is now more affordable than buying a home in the nation’s 18 most populous counties and 37 of 40 counties with at least 1 million people (93%).With wages and home values diverging in different directions, the investment real estate market is witnessing a significant sea change. Buying a home for the purpose of flipping or renting isn’t nearly as achievable as it once was.When it comes to short-term vacation rentals, however, buying a home is by no means a barrier to entry.
What is Airbnb Rental Arbitrage? ‘Rental arbitrage’ is the act of renting a property long-term and then re-renting it on a short-term basis on platforms like Airbnb and HomeAway. Rental arbitrage is a business model that requires little investment, provides positive cash flow, and poses far less risk — and yes, it’s entirely legal.If you’re wondering how to start an Airbnb business or considering a move into Airbnb arbitrage, we’ve got you covered. Here are the best arbitrage opportunities in the United States.
Airbnb Rental Arbitrage Methodology For this study, we leveraged long-term rental data from a 2019 report from the U.S. Department of Housing and Urban Development. We then aggregated AirDNA’s short-term vacation rental data for two-bedroom properties from nearly 3,000 counties and filtered for destinations with at least 100 active listings. The report — which is based on county-level data — ranks U.S. counties by the difference between short-term RevPAR and long-term, lease-style rental revenue.
States With The Highest Potential for Rental Arbitrage Starting from a state-level view, below is a map highlighting the states whose counties have the highest average arbitrage potential. Counties in Hawaii top the list where short-term vacation rentals earn on average $3,079 more than than the cost of a traditional month-to-month lease.Other states following closely behind include Tennessee ($2,620), Wyoming ($2,492), Michigan ($2,353), Colorado ($2,341), Pennsylvania ($2,060), and Massachusetts ($2,059).