Airbnb arbitrage is a business model that involves renting a property from a landlord and subleasing it on a short-term basis on platforms like Airbnb, Vrbo, or Booking.com. In this way, the person who rents the property becomes both a tenant and an Airbnb host who acts as a middleman between the landlord (the property owner) and the Airbnb guests. The goal is to make a profit by charging more for short-term rentals than the cost of long-term rent.

This strategy is becoming increasingly popular because it allows people to make money from short-term rentals without owning a property. It is a way to get into real estate with (almost) no money down, as the only expenses are fixing up the property (if necessary), furnishing the vacation rental (if not already furnished), and providing the first round of supplies for guests.

While Airbnb rental arbitrage is legal in the US housing market, it is important to consider certain regulatory considerations when choosing a location and a property for this strategy. Short-term rental laws are evolving in most large cities across the world, so it is important to make sure that rental options like Airbnb are allowed in the city you’re interested in or that there isn’t a limited number of nights annually you can rent out to guests.

Benefits of rental arbitrage include earning passive income, getting a taste of real estate investing without the necessity to buy a property and commit to investment property ownership, and leveraging other peoples properties through sub-lease agreements. However, there are also some disadvantages, such as the need to pay rent each month regardless of whether there are bookings or not, and the need to comply with local city regulations.

In summary, Airbnb arbitrage is a business model that allows people to make money from short-term rentals without owning a property. It involves renting a property from a landlord and subleasing it on a short-term basis on platforms like Airbnb, Vrbo, or Booking.com. While it is legal in the US housing market, it is important to consider regulatory considerations when choosing a location and a property for this strategy.