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 Hamilton, 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 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 Hamilton, Adam and Mary manages 16 listings and I’m pretty sure that they don’t own all the properties. They made C$205,741 in the last 12 months.
How much can I make with rental arbitrage in Hamilton?
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 Strathcona, located in the V9H district, with serene access to the harbourfront.
Because Hamilton is home to the historic bruce trail and botanical gardens among the other tourist destinations, the rental demand in this area continuously increases!
Profit & Monthly Expense in Hamilton
Based on Airbtics’ data, you can earn a whopping C$6,622 per month for a 3-bedroom apartment in Strathcona alone. With the data provided, you can certainly tell that investing in a property in Hamilton is profitable!
| Average Rent Price | Airbnb Monthly Revenue | Monthly Expense | Monthly Profit |
|---|---|---|---|
| C$2,600 | C$6,622 | C$1,324 | C$2,698 |
Source: Airbtics dashboard
The monthly profit can be calculated by subtracting the Airbnb monthly revenue, the rental price and the monthly expenses (C$6,622-C$2,600-C$1,324= C$2,698).
Startup Cost in Hamilton
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 |
|---|---|
| C$7,200 | 3 months |
The average estimated startup cost (for furnishing) in Hamilton is around C$2,000. To compute the total startup cost, it is necessary to add the 2 months of average rent price (C$5,200). Now that we have a total startup cost of C$7,200, cash return time can be calculated by dividing this by the monthly profit (C$2,698).
Given your monthly revenue of C$2,698, it will take approximately 3 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 Hamilton!
Best Areas for Rental Arbitrage in Hamilton
Before investing in a particular area in Hamilton, 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 boroughs in Hamilton ranked by their annual revenue, along with their occupancy & daily rates!
1. Strathcona (V8E)
Strathcona has a community full of affordable properties & it is one of the increasingly popular house markets in Hamilton. Here’s what you can expect in this neighborhood:
| Type of Bedrooms | Average Rent Price (pcm) | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | C$1,695 | C$2,359 | 78% | C$111 |
| 2-bedrooms | C$1,900 | C$3,019 | 69% | C$98 |
| 3-bedrooms | C$2,600 | C$6,622 | 85% | C$246 |
According to our Airbtics Dashboard, there are more than 15 Airbnb listings with 7 private room properties and 7 one-bedroom properties in this area. The monthly revenue for most properties in Strathcona is more than C$2,372 per month with occupancy being more than 74%.
2. Crown Point West (L8L)
This lively neighborhood among Hamilton has the most selling properties! This is remarkably known for having a relaxed ambiance with green spaces nearby. Here’s what you can expect in this neighborhood:
| Type of Bedrooms | Average Rent Price (pcm) | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| Studio | C$1,325 | C$2,505 | 98% | C$96 |
| 1-bedroom | C$1,599 | C$2,235 | 83% | C$113 |
| 2-bedrooms | C$1,795 | C$2,665 | 76% | C$138 |
This area has a total of 15 Airbnb listings with 3 private room properties and 5 one-bedroom properties. The monthly revenue for most properties in Crown Point West is more than C$3,022 per month with occupancy being more than 71%.
3. Durand (L8P)
Considered one of the oldest neighborhoods in Hamilton, Durand has the finest residential architecture which most tourists enjoy. Here’s what you can expect in this neighborhood:
| Type of Bedrooms | Average Rent Price (pcm) | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | C$1,400 | C$2,227 | 76% | C$132 |
| 2-bedrooms | C$1,680 | C$2,533 | 90% | C$133 |
| 3-bedrooms | C$1,800 | C$4,444 | 87% | C$325 |
This area has a total of 43 Airbnb listings with 13 private room properties and 20 one-bedroom properties. The monthly revenue for most properties in Durand is more than C$2,404 per month with occupancy being more than 64%.
Short-term rental regulations in Hamilton
To begin with, it’s certainly important to be familiar with the Airbnb rules in Hamilton to make sure that your business will run smoothly. Here are some of the short-term rental regulations and ordinances to take note of:
- It is required for a property owner intending to rent out a space for less than 28 days to get a city licence.
- A licence is required for rental housing units and buildings or part of buildings with 4 or less self-contained units, detached homes or townhouses, if rented. The program would require property owners of rental housing to apply for a licence for each rented unit.
- A Licensing Compliance Officer will schedule an appointment with the property owner to gain entry to the building for a Property Standards inspection of each unit. Once all inspections are complete, the property is in compliance with municipal by-laws and relevant legislation and the application has been submitted in full a rental housing licence may be issued.
Rental Properties in Hamilton
Hamilton offers a sweet reward of both natural & city vibes to locals, vacationers, and renters. With an average of 6 million visitors annually, Hamilton is certainly one of the perfect spots for those who are looking to invest in rental properties.
To run an Airbnb rental arbitrage in Canada, you can look at property websites and get a grasp of the ranging prices in Hamilton:
1. Rentals CA
2. Realtor CA
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!
