Do you want to have financial freedom through passive income? Invest in a property! Disclaimer: You don’t need to own a property at all in the Airbnb rental arbitrage business. In fact, some of the most important factors that investors should consider are the occupancy rates, and rental yields and they also must choose the best place for investment property in Australia.
In this article, we featured the entire process of Airbnb rental arbitrage in Brisbane, its profitability, Airbnb key metrics including occupancy and average daily rates, along with the best areas for investment.
Continue reading to learn more about short-term regulations and ways to convince landlords to sublet properties for rental arbitrage.
What is Rental Arbitrage?
Rental Arbitrage is a perfect way to start an Airbnb business with no money. By convincing landlords to lease you a property, you can furnish and sublease it on Airbnb and VRBO. No need for you to buy a property!
It is perfectly legal and is a proven scalable business model. In my podcast, I have spoken to various entrepreneurs doing Airbnb arbitrage full-time.
Here’s a proof! In Brisbane, Lee and Diane manage 92 listings and I’m pretty sure they don’t own all the properties. Overall, they made A$4,433,523 in the last 12 months.
Is Rental Arbitrage Profitable in Brisbane?
In order to start a rental arbitrage in Australia, particularly in Brisbane, it’s primarily important to take note of the overall cost and potential revenue.
For instance, the best neighborhood to invest in is New Farm. This neighborhood continues to be recognized as one of Brisbane’s top suburbs because of its transportation accessibility and entertainment options. Using Airbtics’ income generator, you can easily distinguish that rental arbitrage in Brisbane is profitable.
Profit & Monthly Expense in Brisbane
Based on Airbtics’ data, you can earn a whopping A$9,178 per month for a 3-bedroom apartment in New Farm alone. With the data provided, you can certainly tell that investing in a property in Brisbane is profitable.
| Average Rent Price | Airbnb Monthly Revenue | Monthly Expense | Monthly Profit |
|---|---|---|---|
| A$5,649 | A$9,178 | A$1,836 | A$1,693 |
Source: Airbtics dashboard
The monthly profit can be calculated by subtracting the Airbnb monthly revenue, the rental price, and the monthly expenses (A$9,178 – A$5,649 – A$1,836 = A$1,693).
Startup Cost in Brisbane
Now that you have an overview of how much your monthly expense and revenue, let’s talk about the start-up cost! How long does it take for an investor to get back the startup cost? Let’s take a look at this calculation:
| Total Startup Cost (Average startup cost + 2 months rent price) | Cash Return Time |
|---|---|
| A$13,298 | 8 months |
The average estimated startup cost (for furnishing) in Brisbane is around A$2,000. To compute the total startup cost, it is necessary to add the 2 months of average rent price (A$11,298). Now that we have a total startup cost of A$13,298, cash return time can be calculated by dividing this by the monthly profit (A$1,693).
Given your monthly revenue of A$1,693, it will take approximately 8 months time to get back the startup cost of A$13,298.
In such a brief period of time, you can already expect profit and can even start considering a second unit for rental arbitrage. If this sounds promising to you, then go ahead and look at the other best areas for rental arbitrage in Brisbane!
Best Areas for Rental Arbitrage in Brisbane
Before investing in a particular area in Brisbane, you have to take a look at the top markets and number of listings to set your expectations towards success. Check out the top 3 suburbs in Brisbane ranked by their annual revenue, along with their occupancy & daily rates!
1. Frog’s Hollow
Located in Brisbane’s central district, this neighborhood has an impressive selection of tourist attractions! Check out the Airbnb data such as the average revenue, occupancy rates, and more in Frog’s Hollow:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | A$1,738 | A$2,849 | 89% | A$159 |
| 2-bedrooms | A$3,215 | A$5,214 | 76% | A$302 |
| 3-bedrooms | A$4,345 | A$8,220 | 90% | A$394 |
According to our Airbtics Dashboard, there are more than 195 Airbnb listings with 35 condo properties and 99 one-bedroom properties in this area. The monthly revenue for most properties in Frog’s Hollow is more than A$4,046 per month with occupancy being more than 66%.
2. New Farm
New Farm is also recognized as the Little Italy of Brisbane. This neighborhood has a dynamic nightlife, the grandest parks, and picnic areas. Check out the Airbnb data such as the average revenue, occupancy rates, and more in New Farm:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | A$1,868 | A$3,998 | 83% | A$167 |
| 2-bedrooms | A$3,042 | A$5,315 | 86% | A$328 |
| 3-bedrooms | A$5,649 | A$9,178 | 91% | A$396 |
This area has a total of 77 Airbnb listings with 27 private room properties and 21 one-bedroom property. The monthly revenue for most properties in New Farm is more than A$4,117 per month with occupancy being more than 56%.
3. Fortitude Valley
This neighborhood is home to one of the state’s most culturally diverse communities and offers the best nightlife for tourists! Check out the Airbnb data such as the average revenue, occupancy rates, and more in Fortitude Valley:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | A$1,781 | A$3,349 | 80% | A$175 |
| 2-bedrooms | A$2,716 | A$4,738 | 84% | A$223 |
| 3-bedrooms | A$4,258 | A$7,547 | 88% | A$420 |
This area has a total of 115 Airbnb listings with 24 private room properties and 58 one-bedroom properties in this area. The monthly revenue for most properties in Fortitude Valley is more than A$4,230 per month with occupancy being more than 57%.
Short-term rental regulations in Brisbane
To begin with, it’s certainly important to be familiar with the Airbnb rules in Brisbane to make sure that your business will run smoothly. Here are some of the short-term rental regulations and laws to take note of:
- Before you can host STRs in your home in Brisbane, you must first apply for and receive a Short Term Rental Permit from the city council.
- Hosts have to own the home that they want to rent as an STR.
- The home intended to rent as an STR should be the permanent residence, meaning you reside there for at least 275 days out of the year.
- The home intended to rent as an STR should be a single-family home, not a multi-family home/apartment or an accessory dwelling unit/granny unit/secondary dwelling unit.
- The host has to be present on the property during the rental period; unhosted “whole home” rentals are NOT permitted.
- It is required to pay an application fee in the amount of $323 after your application has been accepted for processing.
Rental Properties in Brisbane
To run an Airbnb rental arbitrage in Australia, you can look at property websites and get a grasp of the ranging prices in Brisbane:
1. Domain
2. Homely
How to Find Landlords for Airbnb Rental Arbitrage
Airbnb investment through rental arbitrage is one of the best strategies to have passive income. However, it could be a challenge to find a landlord that allows their property for subletting on Airbnb. You can also convince a landlord by following the rental arbitrage email template & be extra creative!
Here are ways how you can find landlords that allow Airbnb rental arbitrage:
- Real Estate Websites
Renters in the digital world who are looking for properties online can easily connect with landlords. Some of the most recommended online real estate websites which allow you to filter by city, state, or ZIP code are:
However, you can also find apartment & condominium properties online in the following websites:
Search Engines & Marketplaces
There are numerous property owners who are leasing their properties and you can easily find them on Google & online marketplaces. Check out some of the most recommended marketplaces:
- Craigslist allows renters to specifically state what kind of property they are looking for. You can try typing in ‘landlords allowing Airbnb’ or ‘sublease property in (city name)’ and try other keywords to get you on the right track.
- Facebook marketplace has a vast community of landlords & renters, so you can try joining the right groups to lead you on the right path. Here are some of the finest Facebook groups that you can join:
Communicate with Landlords
If you are currently renting a space or know someone who is, then it’s also recommended to speak with them. Start by asking if there are vacant rooms or properties and let them know about your intentions of putting them up for rental arbitrage. They might also be able to recommend neighbors or local friends who are also interested in this idea!
