Last updated on June 22nd, 2023
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 Bristol, its profitability, and 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 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 Bristol, Mairead manages 20 listings and I’m pretty sure she doesn’t own the all properties. Mairead made £630,855 in the last 12 months.
How much can I make with rental arbitrage in Bristol?
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 Bristol City Centre, located in the BS1 district with an estimated increase of student accommodation developments by 2028!
Since this neighborhood massively covers both student houses & incorporates a wide range of tourist attractions, it has become a preferred area for investors! Now that we have the best neighborhood to invest in Bristol, let’s talk about profitability and monthly expenses.
Profit & Monthly Expense in Bristol
Based on Airbtics’ data, you can earn a whopping £4,047 per month for a 3-bedroom apartment in Bristol City Centre alone. With the data provided, you can certainly tell that investing in a property in Bristol is profitable!
| Average Rent Price | Airbnb Monthly Revenue | Monthly Expense | Monthly Profit |
|---|---|---|---|
| £1,837 | £4,047 | £809 | £1,401 |
Source: Airbtics dashboard
The monthly profit can be calculated by subtracting the Airbnb monthly revenue, the rental price and monthly expense (£4,047-£1,837-£809 = £1,401).
Startup Cost in Bristol
Now that you have an overview of how much your monthly expense and revenue is, let’s talk about the start-up cost! How long does it take for an investor like you 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 |
|---|---|
| £5,674 | 4.1 months |
The average estimated startup cost (for furnishing) in Bristol is around £2,000. To compute the total startup cost, it is necessary to add the 2 months of average rent price (£3,674). Now that we have a total startup cost of £5,674, cash return time can be calculated by dividing this by the monthly profit (£1,401).
Given your monthly revenue of £1,401, it will take approximately 4.1 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 Bristol!
Best Areas for Rental Arbitrage in Bristol
Before investing in a particular area in Bristol, you have to take a look at the top markets and number of listings to set your expectations for success. Check out the top 3 neighbouroods in Bristol ranked by their annual revenue, along with their occupancy & daily rates!
1. Bristol City Centre (BS1)
Numerous investors prefer this area because they are targeting young professionals as Bristol’s employment rate continues to rise! Not to mention Bristol’s booming technology and splendid university city which boosts the overall rental growth demand. Here’s what you can expect in this neighbourhood:
| Type of Bedrooms | Average Rent Price (pcm) | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | £1,282 | £2,341 | 79% | £130 |
| 2-bedrooms | £1,804 | £3,320 | 70% | £205 |
| 3-bedrooms | £1,837 | £4,047 | 76% | £256 |
According to our Airbtics Dashboard, there are more than 256 Airbnb listings with 42 private room properties and 129 one-bedroom properties in this area. The monthly revenue for most properties in Bristol City Centre is more than £2,914 per month with occupancy being more than 54%.
2. Clifton (BS8)
This neighborhood enjoys a huge rental demand due to its accessibility to the city centre with plenty of natural spaces and upmarket local shops. Here’s what you can expect in this neighbourhood:
| Type of Bedrooms | Average Rent Price (pcm) | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | £1,039 | £2,517 | 75% | £141 |
| 2-bedrooms | £1,431 | £3,333 | 73% | £215 |
| 3-bedrooms | £1,858 | £4,976 | 72% | £342 |
This area has a total of 459 Airbnb listings with 112 private room properties and 246 one-bedroom properties. The monthly revenue for most properties in Clifton is more than £2,601 per month with occupancy being more than 53%.
3. Easton (BS5)
Last but not least, Bristol’s most affordable area, Easton! Investors find this area tempting because of its lowest property prices and good yields of 4-5%. Here’s what you can expect in this neighbourhood:
| Type of Bedrooms | Average Rent Price (pcm) | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | £996 | £1,977 | 59% | £123 |
| 2-bedrooms | £1,313 | £2,000 | 70% | £138 |
| 3-bedrooms | £1,571 | £4,844 | 59% | £245 |
This area has a total of 121 Airbnb listings with 47 private room properties and 69 one-bedroom properties in this area. The monthly revenue for most properties in Easton is more than £1,806 per month with occupancy being more than 51%.
Short-term rental regulations in Bristol
To begin with, it’s certainly important to be familiar with the Airbnb rules in Bristol to make sure that your business will run smoothly. Here are some of the short-term rental regulations and laws to take note of:
- It is required to pay a Council tax in Bristol. You can pay in 12 monthly installments, but the payments can only begin at the start of the financial year, which runs from April to March.
- If you are a registered provider of social housing and own or manage houses in multiple occupations, you may not need a licence.
- When determining a property licence application, there’s no requirement for the property to have planning consent. However, to comply with planning legislation, planning consent may need to be obtained.
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!
