Last updated on June 22nd, 2023
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 this article, we featured the entire process of Airbnb rental arbitrage in Adelaide, its profitability, Airbnb key metrics including occupancy & 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 Adelaide, Phil manages 27 listings and I’m pretty sure he doesn’t own all the properties. Overall, he made A$1,684,928 in the last 12 months.
Is Rental Arbitrage Profitable in Adelaide?
In order to start a rental arbitrage in Australia, particularly in Adelaide, it’s primarily important to take note of the overall cost & potential revenue.
For instance, the best neighborhood to invest in is Henley Beach. Aside from the beauty of this cosmopolitan seaside paradise, it is also popular because of the variety of restaurants and shopping districts. Using Airbtics’ income generator, you can easily distinguish that rental arbitrage in Adelaide is profitable.
Profit & Monthly Expense in Adelaide
Based on Airbtics’ data, you can earn a whopping A$11,782 per month for a 3-bedroom apartment in Henley Beach alone. With the data provided, you can certainly tell that investing in a property in Adelaide is profitable.
| Average Rent Price | Airbnb Monthly Revenue | Monthly Expense | Monthly Profit |
|---|---|---|---|
| A$3,693 | A$11,782 | A$2,356 | A$5,733 |
Source: Airbtics dashboard
The monthly profit can be calculated by subtracting the Airbnb monthly revenue, the rental price, and the monthly expenses (A$11,782 – A$3,693 – A$2,356 = A$5,733).
Startup Cost in Adelaide
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 |
|---|---|
| A$9,386 | 2 months |
The average estimated startup cost (for furnishing) in Adelaide is around A$2,000. To compute the total startup cost, it is necessary to add the 2 months of average rent price (A$7,386). Now that we have a total startup cost of A$9,386, cash return time can be calculated by dividing this by the monthly profit (A$5,733).
Given your monthly revenue of A$5,733, it will take approximately 2 months time to get back the startup cost in Adelaide!
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 Adelaide!
Best Areas for Rental Arbitrage in Adelaide
Before investing in a particular area in Adelaide, 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 Adelaide ranked by their annual revenue, along with their occupancy & daily rates!
1. Glenelg
Glenelg is one of the most recommended areas for investors who want to target locals and tourists during the summertime. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Glenelg:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | A$2,824 | A$4,133 | 77% | A$222 |
| 2-bedrooms | A$2,998 | A$6,000 | 74% | A$333 |
| 3-bedrooms | A$3,259 | A$7,791 | 82% | A$412 |
According to our Airbtics Dashboard, there are more than 89 Airbnb listings with 8 condo properties and 37 one-bedroom properties in this area. The monthly revenue for most properties in Glenelg is more than A$4,078 per month with occupancy being more than 62%.
2. North Adelaide
This neighborhood caters primarily to university students and tourists visiting the North Adelaide area. Check out the Airbnb data such as the average revenue, occupancy rates, and more in North Adelaide:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | A$2,607 | A$3,992 | 87% | A$251 |
| 2-bedrooms | A$2,824 | A$4,493 | 81% | A$277 |
| 3-bedrooms | A$3,693 | A$7,099 | 76% | A$384 |
This area has a total of 79 Airbnb listings with 9 private room properties and 27 one-bedroom property. The monthly revenue for most properties in North Adelaide is more than A$3,947 per month with occupancy being more than 70%.
3. Henley Beach
This must-visit destination is popular with both local & international tourists. Because of its close proximity to restaurants, coffee shops, and shopping centers, Henley Beach is definitely a star to property investors. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Henley Beach:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | A$1,781 | A$3,270 | 75% | A$180 |
| 2-bedrooms | A$1,955 | A$4,460 | 78% | A$215 |
| 3-bedrooms | A$3,693 | A$11,782 | 79% | A$538 |
This area has a total of 70 Airbnb listings with 6 private room properties and 14 one-bedroom properties in this area. The monthly revenue for most properties in Henley Beach is more than A$3,732 per month with occupancy being more than 68%.
Short-term rental regulations in Adelaide
To begin with, it’s certainly important to be familiar with the Airbnb rules in Adelaide to make sure that your business will run smoothly. Here are some of the short-term rental regulations and laws to take note of:
- According to the short-term rental accommodation bill, residential premises used for short-term holiday rental accommodation must be registered.
- An application for registration must be approved by the Commission and must be accompanied by the prescribed registration fee
Rental Properties in Adelaide
To run an Airbnb rental arbitrage in Australia, you can look at property websites and get a grasp of the ranging prices in Adelaide:
1. Rent AU
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!
