Last updated on September 4th, 2023
Did you know that 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 Bondi Beach, its profitability, Airbnb key metrics including occupancy and average daily rates.
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 Bondi Beach, Richard manages 7 listings and I’m pretty sure he doesn’t own all the properties. Overall, he made A$39,767 in the last 12 months.
Is Rental Arbitrage Profitable in Bondi Beach?
In order to start a rental arbitrage in Australia, particularly in Bondi Beach, it’s primarily important to take note of the overall cost & potential revenue.
Using Airbtics’ income generator, you can easily find out that rental arbitrage in Bondi Beach is profitable.
Profit & Monthly Expense in Bondi Beach
Based on Airbtics’ data, you can earn a whopping A$11,017 per month for a 3-bedroom apartment in Bondi Beach. With the data provided, you can certainly tell that investing in a property in Bondi Beach is profitable.
| Average Rent Price | Airbnb Monthly Revenue | Monthly Expense | Monthly Profit |
|---|---|---|---|
| A$5,214 | A$11,017 | A$2,203 | A$3,600 |
Source: Airbtics dashboard
The monthly profit can be calculated by subtracting the Airbnb monthly revenue, the rental price, and the monthly expenses (A$11,017 – A$5,214 – A$2,203 = A$3,600).
Startup Cost in Bondi Beach
Now that you have an overview of how much your monthly expense & revenue are, 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$12,428 | 4 months |
The average estimated startup cost (for furnishing) in Bondi Beach is around A$2,000. To compute the total startup cost, it is necessary to add the 2 months of average rent price (A$5,214). Now that we have a total startup cost of A$12,428, cash return time can be calculated by dividing this by the monthly profit (A$3,600).
Given your monthly revenue of A$3,600, it will take approximately 4 months time to get back the startup cost in Bondi Beach.
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 Bondi Beach.
Profitability of Rental Arbitrage in Bondi Beach
Before investing in a particular area in Melbourne, you have to take a look at the top markets and number of listings to set your expectations towards success. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Bondi Beach:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | A$3,042 | A$4,941 | 86% | A$268 |
| 2-bedrooms | A$3,454 | A$6,826 | 84% | A$438 |
| 3-bedrooms | A$5,214 | A$11,017 | 80% | A$826 |
WANT TO DISCOVER MORE PROFITABLE RENTAL MARKETS IN AUSTRALIA?
If you’re looking for other locations, check out the Australian cities with the best real estate markets!
Short-term rental regulations in Bondi Beach
To begin with, it’s certainly important to be familiar with the Airbnb rules in Bondi Beach to make sure that your business will run smoothly. Here are some of the short-term rental regulations and laws to take note of:
- Any short-term rental must be registered and comply with the new Fire Safety Standard.
- For hosted STRAs (the host shares the residence with their guests), the owner can rent out the dwelling 365 days per year with restrictions.
- For non-hosted STRAs (the host does not share the residence with their guests), the 180 days per year limit applies.
- The new STRA planning policy provides a single, streamlined exempt development approval pathway that facilitates STRA in existing, lawfully constructed residential accommodation. STRA cannot be undertaken in the following properties:
× Boarding houses
× Seniors housing
× Rural workers’ dwellings
× Eco-tourist facilities
× Hostels
× Camping grounds
× Caravan parks
× Moveable dwellings
× Group homes
× Refuge or crisis accommodation
× Tourist and visitor accommodation use to ensure they continue to meet their intended purpose.
Rental Properties in Bondi Beach
To run an Airbnb rental arbitrage in Australia, you can look at property websites and get a grasp of the ranging prices in Bondi Beach:
1. Property AU
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!
