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 Canberra, 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 Canberra, Daniel manages 84 listings and I’m pretty sure he doesn’t own all the properties. Overall, he made A$3,792,533 in the last 12 months.
Is Rental Arbitrage Profitable in Canberra?
In order to start a rental arbitrage in Australia, particularly in Canberra, it’s primarily important to take note of the overall cost & potential revenue.
For instance, the best neighborhood to invest in is Canberra City Centre, which is the most eclectic neighborhood in Canberra. Using Airbtics’ income generator, you can easily discover that rental arbitrage in Canberra is profitable.
Profit & Monthly Expense in Canberra
Based on Airbtics’ data, you can earn a whopping A$7,747 per month for a 3-bedroom apartment in Canberra City Centre alone. With the data provided, you can certainly tell that investing in a property in Canberra is profitable.
| Average Rent Price | Airbnb Monthly Revenue | Monthly Expense | Monthly Profit |
|---|---|---|---|
| A$4,128 | A$7,747 | A$1,549 | A$2,070 |
Source: Airbtics dashboard
The monthly profit can be calculated by subtracting the Airbnb monthly revenue, the rental price, and the monthly expenses (A$7,747 – A$4,128 – A$1,549 = A$2,070).
Startup Cost in Canberra
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$10,256 | 5 months |
The average estimated startup cost (for furnishing) in Canberra is around A$2,000. To compute the total startup cost, it is necessary to add the 2 months of average rent price (A$8,256). Now that we have a total startup cost of A$10,256, cash return time can be calculated by dividing this by the monthly profit (A$2
Given your monthly revenue of A$2,070, it will take approximately 5 months time to get back the startup cost in Canberra!
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 Canberra.
Best Areas for Rental Arbitrage in Canberra
Before investing in a particular area in Canberra, 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 Canberra ranked by their annual revenue, along with their occupancy & daily rates:
1. Braddon
This neighborhood in Canberra is best known for its artisan coffee roasters, creative arts centres, and chic restaurants. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Braddon:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | A$2,173 | A$3,860 | 83% | A$177 |
| 2-bedrooms | A$2,737 | A$4,600 | 80% | A$233 |
| 3-bedrooms | A$3,650 | A$5,907 | 77% | A$390 |
According to our Airbtics Dashboard, there are more than 71 Airbnb listings with 5 condo properties and 39 one-bedroom properties in this area. The monthly revenue for most properties in Braddon is more than A$4,084 per month with occupancy being more than 72%.
2. Canberra City Centre
Situated within the heart of Canberra, the city centre is the city’s primary destination for ultimate entertainment and dynamic retail. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Canberra City Centre:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | A$2,303 | A$3,455 | 89% | A$203 |
| 2-bedrooms | A$2,933 | A$5,703 | 78% | A$333 |
| 3-bedrooms | A$4,128 | A$7,747 | 61% | A$442 |
This area has a total of 117 Airbnb listings with 12 private room properties and 57 one-bedroom property. The monthly revenue for most properties in Canberra City Centre is more than A$4,081 per month with occupancy being more than 65%.
3. Kingston
Kingston is known as one of the capital’s most old yet popular suburbs in Canberra. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Kingston:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | A$2,281 | A$4,237 | 88% | A$196 |
| 2-bedrooms | A$2,650 | A$4,285 | 89% | A$245 |
| 3-bedrooms | A$3,172 | A$5,527 | 78% | A$623 |
This area has a total of 73 Airbnb listings with 5 private room properties and 45 one-bedroom properties in this area. The monthly revenue for most properties in Kingston is more than A$4,315 per month with occupancy being more than 73%.
Short-term rental regulations in Canberra
To begin with, it’s certainly important to be familiar with the Airbnb rules in Canberra to make sure that your business will run smoothly. Here are some of the short-term rental regulations and laws to take note of:
- Currently, the Australian Capital Territory Government has no particular regulations in short-term rentals.
- For those who want to sublet the property, a landlord’s written consent is required as stated on the Standard Residential Tenancy Terms and the Residential Tenancies Act 1997 (‘the Act’).
Rental Properties in Canberra
To run an Airbnb rental arbitrage in Australia, you can look at property websites and get a grasp of the ranging prices in Canberra:
1. Real Estate
2. Zango
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!
