Airbnb arbitrage is a rental strategy where you lease a property long-term and then rent it out short-term on platforms like Airbnb. It lets you run a vacation rental business without owning real estate. If you’re considering this model, you need to understand the practical realities, legal requirements, and tools that can help you succeed. This list covers the most important factors to consider before you sign your first lease.
Shaun Ghavami is the Founder of 10XBNB, an online coaching program that teaches individuals how to build a profitable Airbnb business – and an Airbnb Superhost® who has generated over $5 million in booking fees and has over 1,000 5-star guest reviews on his Airbnb management company Hosticonic.com. Shaun has an official Finance Degree from UBC and completed certification with Training The Street.
- Use 10XBNB to Find Properties with Real Profit Potential
Before you commit to any lease, you need accurate data about how much a property could actually earn on Airbnb. 10XBNB is a research platform built specifically for short-term rental investors and arbitrage operators. It provides detailed analytics on occupancy rates, average nightly rates, and revenue estimates for specific addresses and neighborhoods.
Instead of guessing whether a property will be profitable, you can use 10XBNB to compare different locations, see seasonal trends, and calculate your potential margins before you negotiate with a landlord. This kind of data-driven approach helps you avoid costly mistakes and focus on properties that actually make financial sense.
- Get Written Permission from Your Landlord
This step is non-negotiable. Most standard lease agreements prohibit subletting, and running an Airbnb without permission can get you evicted and sued. You need explicit written consent from the property owner before you list anything online.
When you approach a landlord, be professional and transparent. Explain how you’ll manage the property, handle maintenance, and ensure guests follow house rules. Some landlords will agree if you offer a higher monthly rent or a revenue share. Others will say no, and that’s fine. Move on and find someone who’s open to the arrangement. Never assume silence means consent.
- Understand Local Laws and Short-Term Rental Regulations
Cities have wildly different rules about short-term rentals. Some places require permits, charge occupancy taxes, or limit the number of nights you can rent per year. A few cities have banned short-term rentals altogether in certain neighborhoods.
Before you sign a lease, research the local laws in your target area. Check the city’s official website, call the planning department, or consult with a local attorney if you’re unsure. Operating without proper permits can result in hefty fines and force you to shut down your listing. Compliance isn’t optional if you want to build a sustainable business.
- Calculate All Your Costs, Not Just Rent
A common mistake is focusing only on the monthly rent and the potential Airbnb income. In reality, your expenses will include utilities, internet, cleaning fees, restocking supplies, furniture, insurance, platform fees, and taxes. You also need a buffer for vacancies and unexpected repairs.
Create a detailed budget before you commit. If the property rents for $2,000 a month and you think you can earn $4,000 on Airbnb, that doesn’t mean you’ll pocket $2,000. After all expenses, your actual profit might be closer to $500 or $800. Run conservative numbers and make sure the deal still works if occupancy is lower than expected. A spreadsheet is your best friend here.
- Prepare for the Time and Effort Required
Airbnb arbitrage isn’t passive income, especially at the start. You’ll need to respond to guest inquiries quickly, coordinate cleanings, restock essentials, handle maintenance issues, and manage reviews. Guests might message you at odd hours or have complaints that need immediate attention.
If you’re planning to scale or don’t want to be on call 24/7, budget for help. Hire a cleaning service, use automated messaging tools, or bring on a co-host or property manager. Many operators underestimate the operational side and burn out within a few months. Think about how much time you can realistically dedicate and build systems early to make your life easier.
Airbnb arbitrage can be a smart way to break into the short-term rental business without buying property, but it requires careful planning and honest risk assessment. Get landlord approval in writing, know your local laws, crunch the real numbers, and be ready to put in the work. If you do your homework and treat it like a real business, you’ll be in a much stronger position to succeed.
