How to start a successful Airbnb business, without owning any property

Don’t own a property? You can still own a thriving Airbnb business.

My partner and I were trying to save for a house deposit. We realised that it would take a long time applying the normal equation of transferring what was left of our wages into our savings account at the end of the fortnight. We found a system referred to as ‘Airbnb Arbitrage', which was the key to us achieving our goal. Airbnb arbitrage is the practice of renting properties and subletting them on the Airbnb platform. We thought this could be a thriving business in our backyard of Herne Bay, Auckland, and best of all it didn’t require us to own any property.

In our case, we found several units for rent in Herne Bay, all owned by a single landlord. The only issue was that the units were very tired and therefore unsuitable for Airbnb. We put a proposal to the landlord that they renovate the units and lease them back to us at a higher rent. The landlord declined. Ultimately this worked in our favour because we went on to renovate the units ourselves and lease the units at the original (cheap) rental rate. We paid off the renovation within six months and continued to enjoy an ongoing low rental rate, which is far better than paying higher rent long term. Why? Because of this simple equation:

{Income from Airbnb} - {Rent paid to the Landlord} = Margin

You may have heard the mantra of people who make a living from real estate: ‘You make your money when you buy’. A similar principle applies to successful Airbnb arbitrage - you make your money on the leases you sign with landlords. The more favourable the lease terms are, the greater the margin will be. If run well, a person involved in Airbnb arbitrage in the Greater Ponsonby area will stand to make a margin of $10,000-$20,000 per Airbnb, per year.

The beauty of Airbnb arbitrage is it is scalable - once you have the systems in place for your 1st Airbnb, those same systems can be replicated to set up your 2nd, 3rd, 4th Airbnb and so on. If you set up five Airbnbs the margin could be up to $100k p.a. - without owning any property. Not bad income for a part-time side business! (Ryan Weir)

#ponsonbynews #iloveponsonby #ponsonby #auckland #aucklandshippestrip #onlyponsonby #ponsonbyroad #Greylynn #freemansbay #westmere #ponsonby #hernebay #stmarysbay #archhill #family #friends #coxsbay #aribnb

Published 1 October 2021