Last updated on June 22nd, 2023
Do you want to have financial freedom through passive income? Here’s a great way to do so: Invest in a property! And no – 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 Byron Bay, 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 Byron Bay, Meg manages 11 listings and I’m pretty sure she doesn’t own all the properties. Overall, she made A$1,181,736 in the last 12 months.
Is Rental Arbitrage Profitable in Byron Bay?
In order to start a rental arbitrage in Australia, particularly in Byron Bay, it’s primarily important to take note of the overall cost & potential revenue.
For instance, the best neighborhood to invest in is Byron Beach, which is part of the world-renowned seaside town in New South Wales. Using Airbtics’ income generator, you can easily distinguish that rental arbitrage in Byron Bay is profitable.
Profit & Monthly Expense in Byron Bay
Based on Airbtics’ data, you can earn a whopping A$13,561 per month for a 3-bedroom apartment in Byron Beach alone. With the data provided, you can certainly tell that investing in a property in Byron Bay is profitable.
| Average Rent Price | Airbnb Monthly Revenue | Monthly Expense | Monthly Profit |
|---|---|---|---|
| A$5,760 | A$13,561 | A$2,712 | A$5,089 |
Source: Airbtics dashboard
The monthly profit can be calculated by subtracting the Airbnb monthly revenue, the rental price, and the monthly expenses (A$13,561 – A$5,760 – A$2,712 = A$5,089).
Startup Cost in Byron Bay
Now that you have an overview of how much your monthly expense and revenue are, let’s talk about the startup 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$13,520 | 3 months |
The average estimated startup cost (for furnishing) in Byron Bay is around A$2,000. To compute the total startup cost, it is necessary to add the 2 months of average rent price (A$11,520). Now that we have a total startup cost of A$13,520, cash return time can be calculated by dividing this by the monthly profit (A$5,089).
Given your monthly revenue of A$5,089, it will take approximately 3 months time to get back the startup cost in Byron Bay.
In such a short 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 Byron Bay.
Best Areas for Rental Arbitrage in Byron Bay
Before investing in a particular area in Byron Bay, 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 Byron Bay ranked by their annual revenue, along with their occupancy & daily rates!
1. Byron Beach
This neighborhood is popular due to its close proximity to Byron Bay town. The majority of tourists who like to surf and visit other attractions such as Apex Park & Surf Club usually prefer to be in this neighborhood. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Byron Beach:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | A$2,737 | A$6,387 | 71% | A$396 |
| 2-bedrooms | A$3,563 | A$9,828 | 71% | A$634 |
| 3-bedrooms | A$5,760 | A$13,561 | 61% | A$890 |
According to our Airbtics Dashboard, there are more than 149 Airbnb listings with 20 condo properties and 46 one-bedroom properties in this area. The monthly revenue for most properties in Byron Beach is more than A$6,226 per month with occupancy being more than 57%.
2. Tallow Beach
Located in the heart of Byron Bay, Tallow Beach is perfect for backpackers, campers & surfers, and is a great place for fishing! Check out the Airbnb data such as the average revenue, occupancy rates, and more in Tallow Beach:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | A$2,694 | A$7,667 | 76% | A$351 |
| 2-bedrooms | A$3,389 | A$9,933 | 76% | A$484 |
| 3-bedrooms | A$7,169 | A$12,025 | 66% | A$860 |
This area has a total of 110 Airbnb listings with 28 private room properties and 39 one-bedroom property. The monthly revenue for most properties in Tallow Beach is more than A$5,264 per month with occupancy being more than 65%.
3. Cape Byron
This stunning suburb in Byron Bay is one of the most adored because of its serene views and coastal trails. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Cape Byron:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | A$3,042 | A$5,591 | 66% | A$293 |
| 2-bedrooms | A$3,563 | A$7,117 | 64% | A$726 |
| 3-bedrooms | A$6,257 | A$9,795 | 59% | A$857 |
This area has a total of 35 Airbnb listings with 2 private room properties and 16 one-bedroom properties in this area. The monthly revenue for most properties in Cape Byron is more than A$6,124 per month with occupancy being more than 54%.
Short-term rental regulations in Byron Bay
To begin with, it’s certainly important to be familiar with the Airbnb rules in Byron Bay to make sure that your business will run smoothly. Here are some of the short-term rental regulations and laws to take note of:
- Your house or unit CAN NOT be used for non-hosted STRA (Short-term Rental Accommodation) for more than 180 days in a 365-day period.
- All hosts must register their STRA property on the State Government-run STRA Register.
- All hosts must comply with the fire and safety requirements and agree to follow the NSW Fair Trading Code of Conduct for the STRA Industry.
- Hosts are required to pay a registration fee of $65 for the first 12 months and an annual renewal fee of $25.
- There are Strata by-laws that restrict certain types of short-term rentals.
Rental Properties in Byron Bay
To run an Airbnb rental arbitrage in Australia, you can look at property websites and get a grasp of the ranging prices in Byron Bay:
1. Real Estate
2. All Homes
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!
