Are you interested in achieving financial independence through passive income? Here’s a disclaimer: you don’t need to own a property to start the Airbnb rental arbitrage business.
In this article, we featured the entire process of Airbnb rental arbitrage in Reno, its profitability, along with the best areas and neighborhoods. 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 Reno, Majid manages 24 listings and there’s a huge possibility that he doesn’t own all the properties. He has made $1,231,021 in the last 12 months.
Is Rental Arbitrage Profitable in Reno?
Before you dive in and start putting out your hard-earned money on a property, it’s important to know how much profit you can make. For instance, the best neighborhood to invest in is West University where an average host can earn $3,396 monthly for a 3-bedroom apartment.
Using Airbtics’ income generator, you can easily discover that rental arbitrage in Reno is profitable.
Profit & Monthly Expense in Reno
Based on Airbtics’ data, you can earn a whopping $3,396 per month for a 3-bedroom apartment in West University alone. With the data provided, you can certainly tell that investing in a property in Reno is profitable.
| Average Rent Price | Airbnb Monthly Revenue | Monthly Expense | Monthly Profit |
|---|---|---|---|
| $2,095 | $3,396 | $679 | $622 |
Source: Airbtics dashboard
The monthly profit can be calculated by subtracting the Airbnb monthly revenue, the rental price, and the monthly expenses ($3,396 – $2,095 – $679= $622).
Startup Cost in Reno
Now that you have an overview of how much your monthly expense & 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 |
|---|---|
| $6,190 | 10 months |
The average estimated startup cost (for furnishing) in Reno is around $2,000. To compute the total startup cost, it is necessary to add the 2 months of average rent price ($4,190). Now that we have a total startup cost of $6,190, cash return time can be calculated by dividing this by the monthly profit ($622).
Given your monthly revenue of $622, it will take approximately 10 months time to get back the startup cost! In such a short period of time, you can already expect profit and consider starting your 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 Reno.
Best Areas for Rental Arbitrage in Reno
Before investing in a particular area in Reno, 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 Reno ranked by their annual revenue, along with their occupancy & daily rates!
1. West University
West University is one of the many neighborhoods in Reno that most travelers prefer to visit because of its research institution and student communities. Check out the Airbnb data such as the average revenue, occupancy rates, and more in West University:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1 bedroom | $1,225 | $1,937 | 73% | $99 |
| 2-bedroom | $1,650 | $3,467 | 88% | $147 |
| 3-bedroom | $2,095 | $3,396 | 76% | $273 |
According to our Airbtics Dashboard, there are more than 32 Airbnb listings with 14 private room properties and 5one-bedroom properties in this area. The monthly revenue for most properties in West University is more than $2,645 per month with occupancy being more than 80%.
2. Wells Avenue
This neighborhood in Reno is preferred by tourists who love seeing art murals and picturesque restaurants. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Wells Avenue:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1 bedroom | $1,262 | $1,880 | 70% | $111 |
| 2-bedroom | $1,550 | $3,031 | 87% | $167 |
| 3-bedroom | $1,850 | $5,125 | 79% | $371 |
This area has a total of 35 Airbnb listings with 4 private room properties and 15 one-bedroom property. The monthly revenue for most properties in Wells Avenue is more than $2,615 per month with occupancy being more than 65%.
3. Downtown
Downtown Reno has a vibrant event center with residential condos and amenities. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Downtown Reno:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| Studio-type | $1,100 | $2,064 | 92% | $68 |
| 1 bedroom | $1,360 | $2,607 | 81% | $163 |
| 2-bedroom | $1,700 | $3,285 | 69% | $215 |
This area has a total of 48 Airbnb listings with 2 private room properties and 18 one-bedroom properties. The monthly revenue for most properties in Downtown is more than $3,682 per month with occupancy being more than 69%.
Short-term rental regulations in Reno
To begin with, it’s certainly important to be familiar with the Airbnb rules in Reno to make sure that your business will run smoothly. Here are some of the short-term rental regulations and laws to take note of:
- If your STR is within the City of Reno or City of Sparks, you CANNOT obtain a permit. Washoe County Planning and Building Department DOES NOT have jurisdiction over the City of Reno and the City of Sparks.
- A number of cities in Nevada including Henderson, Las Vegas, and Mesquite have approved specific ordinances to regulate STRs. At this time, many other cites — such as Boulder City, Ely, North Las Vegas, and Reno — appear to be in the process of developing an STR ordinance.
- Short-term rental owners must have a designated local representative available 24/7 and must meet liability coverage minimums.
- Short-term rentals must establish a minimum distance of 660 feet between any residential units.
- There must be a 2,500-foot distance between a short-term rental and a resort hotel.
- Short-term rentals are prohibited to rent for parties, weddings, events, or other large gatherings.
Rental Properties in Reno
There are plenty of best places to Airbnb in Nevada, particularly in Reno. Here are the ranging prices of rental properties in Reno:
1. Zillow
2. Trulia
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!
