Maximize Your Earnings: The Ultimate Guide to Rental Arbitrage on Airbnb

What is Airbnb Rental Arbitrage? Introduction

Airbnb rental arbitrage is a business strategy that involves renting a property from a landlord and then re-renting it out on Airbnb for a profit. In other words, the person renting the property becomes a sub-landlord, earning money on the difference between the rent paid to the landlord and the amount earned from renting the property out on Airbnb.

This strategy can be beneficial for both the sub-landlord and the landlord. The sub-landlord can earn a profit by charging a higher nightly rate than they pay in rent to the landlord. The landlord can benefit from having a guaranteed tenant, even if the sub-landlord is the one responsible for managing the property and dealing with guests. Airbnb rental arbitrage can be a lucrative way to earn money through short-term rentals. With careful planning, research, and attention to detail, sub-landlords can turn a profit while providing an enjoyable and comfortable stay for Airbnb guests.

Is Airbnb rental arbitrage legal?

The legality of Airbnb rental arbitrage can vary depending on the location of the rental property. In many areas, short-term rentals are regulated or prohibited, which can make rental arbitrage on Airbnb illegal or in violation of local laws.

It is important for anyone considering rental arbitrage on Airbnb to research local regulations and laws related to short-term rentals. Some cities and towns require hosts to obtain a permit or license, pay taxes, and follow specific safety and zoning regulations. In some cases, violations of these regulations can result in fines or legal action.

It’s worth noting that even in areas where short-term rentals are allowed, the terms of a lease or rental agreement with a landlord may prohibit sub-leasing or short-term rentals. Violating these terms can result in eviction or legal action from the landlord.

In short, while Airbnb rental arbitrage can be a lucrative business opportunity, it is important to thoroughly research and comply with all relevant laws and regulations, and to ensure that any rental agreements allow for short-term rentals.

What Are the Benefits of AirBnb Rental Arbitrage?

Airbnb rental arbitrage can have several benefits for property owners and managers who are interested in short-term rentals. Here are a few potential benefits:

  1. Increased Revenue: By renting out a property on Airbnb, the sub-landlord can earn more revenue than they pay in rent to the landlord. This can be especially beneficial if the sub-landlord is able to charge higher nightly rates than the landlord does.
  2. Flexibility: Airbnb rental arbitrage can provide greater flexibility in terms of managing the property. Unlike traditional long-term rentals, sub-landlords can block off dates when they want to use the property themselves or when it is being serviced or maintained.
  3. Lower Risk: Because the sub-landlord is responsible for managing the property, dealing with guests, and maintaining the property, the landlord may face less risk and liability than if they were renting to individual tenants.
  4. Potential for Long-Term Agreements: In some cases, a landlord may be interested in entering into a long-term agreement with a sub-landlord who can guarantee a steady stream of rental income and reliable tenants.
  5. Opportunities for Growth: Successful Airbnb rental arbitrage can provide opportunities for expansion and growth, as sub-landlords can potentially add more properties to their portfolio and scale their business.

Of course, it’s important to note that Airbnb rental arbitrage can also have drawbacks and risks, such as the need to comply with local regulations and to manage the property effectively to ensure guest satisfaction and safety. However, for those who are willing to put in the work and take on the risks, rental arbitrage on Airbnb can be a lucrative and rewarding business opportunity.

What are the top 10 best cities in united states for Airbnb Rental Arbitrage.

The profitability of Airbnb rental arbitrage can depend on various factors such as location, demand, and local regulations. Here are ten cities in the United States that are often considered among the best for Airbnb rental arbitrage:

  1. Las Vegas, Nevada
  2. Nashville, Tennessee
  3. New Orleans, Louisiana
  4. Orlando, Florida
  5. San Diego, California
  6. San Francisco, California
  7. Seattle, Washington
  8. Denver, Colorado
  9. Austin, Texas
  10. Atlanta, Georgia

However, it’s important to note that regulations related to short-term rentals can vary widely from city to city in the United States. It’s essential to research and comply with all relevant regulations and laws, and to consider factors such as seasonality, local events, and tourist demand when assessing the potential profitability of an rental arbitrage airbnb property.

How AirDNA plays a vital role in this?

AirDNA, a data and analytics platform for the short-term rental industry, can play a vital role in assessing the profitability of Airbnb rental arbitrage in these cities. AirDNA provides a wealth of data and insights on short-term rental properties, including nightly rates, occupancy rates, and revenue projections. By using AirDNA, potential investors can conduct in-depth market research to determine the demand and potential profitability of short-term rentals in a given city or neighborhood.

AirDNA also provides a tool called MarketMinder, which can help investors identify emerging markets and market trends. With this tool, investors can access data on short-term rental supply and demand, average daily rates, and other market indicators, to identify potential opportunities for investment.

By leveraging AirDNA’s data and insights, investors can make informed decisions about where to invest in Airbnb rental arbitrage properties, and can potentially increase their chances of success. However, it’s important to note that other factors, such as local regulations and market competition, can also play a significant role in the success of a rental arbitrage property.

How To Calculate ROI for Rental Arbitrage AirBnb

Calculating the return on investment (ROI) for an Airbnb rental arbitrage property is essential to determining its profitability. Here are the steps to calculate the ROI:

  1. Calculate the total investment: This includes the costs of renting the property, furnishing it, and any other expenses associated with setting up the Airbnb listing, such as cleaning and guest management fees.
  2. Estimate the expected annual revenue: Based on the nightly rate and occupancy rate, estimate the expected annual revenue for the property.
  3. Subtract annual expenses: Deduct any annual expenses, such as property taxes, insurance, utilities, and maintenance costs.
  4. Calculate the net profit: Subtract the annual expenses from the expected annual revenue to get the net profit.
  5. Divide net profit by total investment: Divide the net profit by the total investment to get the ROI.

For example, suppose the total investment is $50,000, the expected annual revenue is $40,000, and annual expenses are $10,000. In that case, the net profit would be $30,000 ($40,000 – $10,000), and the ROI would be 60% ($30,000 / $50,000).

It’s important to note that this is a simplified example, and many other factors can impact the profitability of an rental arbitrage airbnb property, such as local regulations, seasonality, and market competition. It’s also important to consider potential risks and challenges, such as unexpected maintenance costs, low occupancy rates, and the potential for damage or liability issues. Conducting thorough research and due diligence is crucial to ensure a successful ROI.

How to find best Rental Arbitrage AirBnb properties by AirDNA

AirDNA is a great tool to help find potential rental arbitrage properties on Airbnb. Here are the steps to find the best rental arbitrage properties using AirDNA:

  1. Go to the AirDNA website and create an account.
  2. Click on the “MarketMinder” tab at the top of the page.
  3. Set the location for your search by entering the city or ZIP code of your desired area.
  4. Choose the type of property you are interested in, such as a studio, one-bedroom, or two-bedroom apartment.
  5. Set the search parameters for your property, including the minimum and maximum price, occupancy rate, and revenue.
  6. Use the “Filters” option to narrow down your search further by choosing specific amenities, such as Wi-Fi or a pool.
  7. Look through the search results to find properties that meet your criteria and have the potential for rental arbitrage.
  8. Analyze the data for each property to see if it has consistent demand and good revenue potential.

By following these steps, you can use AirDNA to find the best rental arbitrage properties on Airbnb in your desired location. It’s important to keep in mind that while AirDNA can provide valuable data, it’s still important to do your own research and due diligence before making any investments.


In conclusion, using AirDNA to find the best rental arbitrage properties on Airbnb can be a helpful tool in identifying potential investment opportunities. By setting your search criteria and using the various filters available, you can narrow down your search to properties that meet your specific needs and have the potential for good revenue.


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