Airbnb Rental arbitrage is a way you can start Airbnb hosting, without actually owning property. Wondering how to get a landlord to say yes to an Airbnb? This is one of the questions I get most: HOW to talk to a potential landlord to let you rent their space on Airbnb. Let’s learn how!
You’ve found the perfect space, in a great area and you KNOW you can rock it as an Airbnb host. But, it’s not your space, and it belongs to someone else, minor detail right!?
Airbnb is versatile for hosts, as there are so many different ways to earn via the platform. Airbnb rental arbitrage is one popular avenue to consider if you want to host on Airbnb and make a good profit.
Many landlords are happy to just have low-risk + long-term tenants. If they were, it would already be on Airbnb, right? So, how can you meet in the middle and convince a landlord to let you rent it as a short-term rental? In this article, I’ll give you some tips on how to approach a landlord and how to sweeten the deal, so everyone benefits!
What Is Airbnb Rental Arbitrage?
In simple terms, Airbnb rental arbitrage is renting properties just to sublet them on Airbnb. In other words, you can start to earn money by listing a property on Airbnb if you make more than the amount of your rent + business-related expenses. Although it sounds easy and a no-brainer, there are still legal issues to take into consideration before you decide to earn with Airbnb arbitrage.
Research Local Laws and Rules.
Before you start looking for that perfect space, there is some very and research you need to do before you even ask. Know what your city laws are for Airbnbs. Most importantly, Are STR’s allowed, and DO you need a license? Are certain city zones allowed to have STR’s and others not? Take time to review the rules and other laws in your city or state to make sure you’re complying with them. A quick call to your local city hall will give you those answers. Once you have these answers you will know where to look for a place to rent!
Research the Buildings Rules.
O.k so now you have found a place that you love, it’s perfect! Ask the landlord about the building’s rules and pay special attention to any rules about guests or subletting contracts, and rules that will affect you, such as leases, condo board or co-op rules, HOA rules, or rules set by tenant organizations. You can ask your landlord if you’re unsure about anything.
Make sure you understand and comply with all of these rules before listing your space so that you can continue subletting it without an issue.
Put Yourself in the Shoes of a Landlord.
To understand where the landlord is coming from you have to understand how they see their own investment property. Renting long-term is considered low risk and a good source of income over time. Try to think about the things that influenced your landlord’s decision to rent long-term in the first place.
#1 The property is going to make them the same amount of money every month for the term of their tenants’ lease.
#2 Most landlords, do not see a reason to invest more energy and time into their properties – they see it as a long-term, fixed income stream. Any extra effort spent on the rental can often be seen as a waste of time for them.
#3 The very worst-case scenario for a landlord would be property damage or losing a tenant. But, tenants can be replaced and insurance can be purchased to cover property damage. As you can see, it’s pretty low risk.
Now, imagine that you are the owner of this property. You have put a lot of effort into getting it ready to lease and now you’ve found an interested tenant.
Imagine that tenant (p.s it’s you) approaches and asks if they can sublet it and let strangers, in and out of their space for their own profit. Their property just went from being safe and low-risk to very HIGH risk.
Yikes! Why would they ever agree to this? By hearing you out, you can calm the shock of your request with solid reasons.
Make a Great First Impression.
Now is the part where you need to convince the landlord to consider renting it to you, to make an Airbnb. They probably don’t know much about hosting and may have some hesitation about the idea.
First, let your landlord know more about who you are, how you care for your home, and why you want to host on Airbnb. Let them know what Airbnb Rental arbitrage is, and how you plan on doing this.
- Be confident. Tell your landlord about yourself and why you want to host on Airbnb. If you can’t do this in person, send them a message.
- Show your landlord that you care about your home, your building, and your neighbors. Give them a tour of your space and share some photos of your home if you don’t host already.
- If you already have an Airbnb, show them your reviews and have a few references from other landlords who can attest to how it is positive for them.
- Let your landlord know how Airbnb is a community built on trust, with trust and safety resources like the $1,000,000 Host Guarantee and the $1,000,000 Host Protection Policy.
Give Reasons Why Airbnb Guests are Low-Risk.
Your main focus should be simply starting a dialogue about what they know about Airbnb. Then you can gauge how to approach the conversation. They may be familiar, but they also may know nothing. Let your landlord know how Airbnb is a community built on trust, with trust and safety resources like our $1,000,000 Host Guarantee and our $1,000,000 Host Protection Policy.
There are definite benefits to having short-term guests over a long-term tenant.
- Less wear and tear, guests usually don’t cook often so the kitchen is used much less.
- The space will be professionally cleaned multiple times per month.
- Any damages are quickly fixed and repaired by you or Airbnb’s insurance
- No risk of getting bad tenants such as squatters, hoarders, partiers
If they are still hesitant…
- You can offer to share profits and give them a percentage of each booking, which would yield them a higher rent. The Airbnb Friendly Buildings Program helps hosts partner with their landlords to agree on rules and update agreements, so they can host on Airbnb!
In this agreement Landlords and hosts can agree to share portions of the reservation income, and use it for community funds or renovations, making hosting beneficial to everyone. To learn more about the program, you can view FAQs or complete their online form.
Other ways you can help to make the landlord gain more benefits to agreeing:
- Offer to pre-pay a few months rent upfront
- Offer to purchase your own vacation rental insurance
- Amend your rental contract to offer coverage of certain damages yourself
- Increase the size of your security deposit
- Offer to extend your lease
Create Solid Rules that Work for All.
Collaborating with your landlord to set guidelines about when and how you’ll host guests, will make them feel part of the process.
To show your landlord you’re a responsible host and help them feel more comfortable:
- Agree on how often you’ll be hosting guests in their space
- Set a limit for the number of guests allowed to stay at one time
- Set House rules: No events, parties, pets, extra guests, or shoes in the house
- Share your home and building rules with each guest. Show your landlord your listing page that details your house rules and how guests will behave.
- Let them know about the review system and how guests are on their best behavior
- Give your guests emergency phone numbers and a map of emergency exits and evacuation routes
Keep everyone in the Loop.
Show your commitment to being a responsible host by making neighbors are comfortable with you hosting on Airbnb. Let them know that they can report an issue with an Airbnb host or guest, and they will reach out to resolve it. This way, if they can feel more in control, it will be much easier for them to agree.
To avoid any surprises, let your landlord know when you get reservations. They may feel more comfortable with you hosting guests if they know when to expect them. With your guests’ permission, you can also share their names or Airbnb profiles with your landlord as a co-host so that your landlord knows who’s going to be staying in the space.
Ask Questions and Show Confidence
If your landlord declines your request to host on Airbnb, don’t be afraid to ask why. You may be able to address their concerns, help them understand more about Airbnb, or encourage them to partner with you through the Friendly Buildings Program. If they are still uninterested, use their feedback to help you when you approach the next landlord.
Create your Listing with an Ambassador
Once you have found the perfect place, and a landlord who agrees, I’d love to help you! As well as blogging and hosting my own properties, I also work as an Airbnb Ambassador! This means that Airbnb Pays me to help new hosts through the start-up process of your hosting journey! It’s free for you!
From your story and decor to setting up a listing and welcoming your first guests. I am your 24/7 mentor, to support you and answer all of your questions! And, once your listing is ready to go live, I’ll take a look at it and give you my personalized feedback! You’ll also get a $50 bonus from Airbnb for using an ambassador when you host your first guests!
I can help for 90 days once you sign up, so just click on my link when you are ready to start the listing. Here’s my invitation link to learn more!