Thinking of starting an Airbnb business but don’t own a listed property? Well, how about trying Airbnb rental arbitration?? This guide will teach you everything you need to know about how to start an Airbnb business without owning a home.
Rent arbitrage is an Airbnb start-up strategy where you Find places to rent, contact their landlords or owners, and ask permission if you can use their property as a short-term rental on Airbnb.
Yes, it is completely legal. However, there are many things that will go into it first before you can call it a successful venture.
Any idea how it works? Don’t worry. Because today you are going to discover how this trick is done.
How to start an airbnb business without owning a home – First step
Rent Arbitration A great strategy for beginners who don’t own property and don’t have enough capital to buy one (yet) but still want to get their feet wet in the business.
And the first steps are simple:
Step 1. Find properties for rent
Step 2. Check your Airbnb Subleasing criteria
Step 3. Know your contract
Step 1. View properties for rent
If you want to find a property for rent, you just go online and visit a site like Zillow.
Just type in the cities and areas you want to do business in, and study the ones that catch your eye.
But for this you need to take extra precautions. Not every rental property can be used for subleasing. There are standards to follow.
This brings us to step 2.
Step 2. Check your Airbnb subleasing criteria
We’ve listed the 7 most important things a potential sublease must have in order to be considered equal…
- Must be in a city that allows Airbnbs
- Must be within your budget
- Must have air conditioning and heat
- Must be reformed
- There should be parking for two or more cars
- Should not be on main road
- Should not be near train stations or train tracks
How to Start an Airbnb Business Without Owning a Home – Subleasing Criteria Explained
1. Be in a city that allows Airbnbs
The first thing you’ll want to do is make sure your potential property is in a city, state or area that allows short-term rentals.
Based on research, about 3% of US cities don’t allow short-term rentals, so it’s important that your future Airbnb location isn’t in one of those.
To check, you can go to Google and type:
“Building categories in city (insert city of your potential property)”.
Call the local number that comes up and ask what their short-term rental ordinances are.
2. Be within your budget
How much are you willing to make for your business?
If you have a large capital, you can go for a house of 1100 square feet with 3 bedrooms and 2 bathrooms.
But if your budget is a little tight, you can still go for a 700 sq ft plus apartment or a house with 2 bedrooms and 1 bathroom.
3. Must have air conditioning and heat
Making sure your guests are comfortable no matter the season is paramount to their comfort and your customer reviews.
So if you can rent a property that already has air conditioning and heating systems installed, that would be ideal.
4. Reforms are a must
You don’t want to renovate a property you don’t own because it will blow your budget and you won’t be able to renovate for yourself.
So try to go for properties that have already been renovated. And if they already have furniture and appliances, that would be even better.
5. There must be parking for two or more vehicles
This is for complete ease of access for guests bringing their cars.
You don’t want them to park far from your place. This is inconvenient and will ruin your reviews
6. Should not be on main road
The property on the main street is not very safe.
Some drivers go about 60 to 70 miles per hour on major highways, and you don’t want your guests to feel like they’re speeding past every time.
7. Should not be near a train station or a train track
Avoid properties less than half a mile from these train stations
These places can be very loud and annoying and can disturb the peace of your guests.
Now, let’s summarize. Here’s what you want for a good sublease:
You are looking for a property that is in a city that allows short-term rentals.
If you are on a tight budget, you can go for a 700 sq ft house or apartment with 2 bedrooms + 1 bathroom, or if you have enough capital, you can try a 3 bedroom + 2 bathroom, 1100 sq ft property.
It must be renovated and have AC and heat. There should be enough parking for two cars.
And it’s definitely on the main road and definitely not near a train station.
Now in my own experience, I have built an airbnb business Budget range is $7,000 to $15,000.
And I know many people who did the same.
In fact, they use the profits from their sublease to increase their capital and accelerate their cash flow before purchasing their own real estate.
Do landlords really allow rent arbitration?
If this is the first time you’ve heard about rent arbitration, this question may also be on your mind.
And we need to address that before moving on to the next step.
Some landlords don’t like the concept of short-term rentals like Airbnb because they don’t want to go through the hassle of welcoming new guests every week.
So they would rather offer their space to other people who are willing to use it for their business.
And as long as you’re paying them rent and you’re taking care of the place, they’ll be fine with you.
Of course, that doesn’t mean you shouldn’t have a legal contract
It’s still very important (and we’ll talk about it in the next part of this article), but the gist is that they’ll allow you to sublease their property because that’s the kind of long-term business they want.
So the short answer to the question is yes because most landlords want to generate passive income themselves.
Now that’s settled, let’s move on to the next step.
Step 3. Know your contract
Your contract with your landlord will usually include signing a lease for 12 months to rent the property.
During this time, you will have control over how you use the space for your business.
The agreement should also state that the landlord knows that you:
- Using their property for your short-term rental
- You have control over the locks throughout the rental period
- They are giving you all the permissions you need to move forward with your business
Don’t forget to sign a permit and trade off your landlord’s back. If you get caught and even get sued, your business will be short-lived.
Now that we’ve covered everything you need to do to start a sublease, it’s time to do the real work!
In fact, you can start prospecting for positions as early as now.
Just look for a studio, a one-bedroom apartment, or a two-bedroom house with a monthly rent of $1,500. Expand your network And talk to the landlords, get their permission and pay the first month’s deposit.
Then you can set up the furniture and add a few decorations.
Once you’ve got professional photos taken for your upload to Airbnb, you’ll be set in no time!
So are you ready to start your side hustle, accelerate your cash flow and start your own business without owning property?
Try Airbnb Rental Arbitration today!
Guest post by George Contreras.
Coach and real estate investor.
*disclosure: I only recommend products that I would personally use and all opinions expressed here are our own. This post may contain affiliate For links that are at no additional cost to you, I may receive a small commission.