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 Niagara Falls, 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 Niagara Falls, Harjot manages 27 listings and I’m pretty sure that he doesn’t own all the properties. He made C$1,688,870 in the last 12 months.
How much can I make with rental arbitrage in Niagara Falls?
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 Niagara Falls Centre, located in the L2E district, where the majority of tourists from all over the world prefer to stay.
This neighborhood is mostly preferred by vacationers because of its easy-going vibe and accessibility to public transportation & restaurants. Hence, the rental demand constantly increasing!
Profit & Monthly Expense in Niagara Falls
Based on Airbtics’ data, you can earn a whopping C$5,778 per month for a 3-bedroom apartment in Niagara Falls Centre alone. With the data provided, you can certainly tell that investing in a property in Niagara Falls is profitable!
| Average Rent Price | Airbnb Monthly Revenue | Monthly Expense | Monthly Profit |
|---|---|---|---|
| C$2,295 | C$5,778 | C$1,156 | C$2,327 |
Source: Airbtics dashboard
The monthly profit can be calculated by subtracting the Airbnb monthly revenue, the rental price and the monthly expenses (C$5,778-C$2,295-C$1,156= C$2,327).
Startup Cost in Niagara Falls
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$6,590 | 3 months |
The average estimated startup cost (for furnishing) in Niagara Falls is around C$2,000. To compute the total startup cost, it is necessary to add the 2 months of average rent price (C$4,590). Now that we have a total startup cost of C$6,590, cash return time can be calculated by dividing this by the monthly profit (C$2,327).
Given your monthly revenue of C$2,327, 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 Niagara Falls!
Best Areas for Rental Arbitrage in Niagara Falls
Before investing in a particular area in Niagara Falls, 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 Niagara Falls ranked by their annual revenue, along with their occupancy & daily rates!
1. Niagara Falls Centre (L2E)
Named after the famous waterfalls itself, the Niagara Falls Centre is a popular neighborhood because of its easy accessibility to tourist attractions, shopping districts, restaurants, and more! 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$1,650 | C$2,989 | 86% | C$172 |
| 2-bedrooms | C$1,950 | C$3,107 | 68% | C$219 |
| 3-bedrooms | C$2,295 | C$5,778 | 78% | C$272 |
According to our Airbtics Dashboard, there are more than 57 Airbnb listings with 12 condo properties and 12 one-bedroom properties in this area. The monthly revenue for most properties in Niagara Falls Centre is more than C$2,366 per month with occupancy being more than 33%.
2. Ryerson (M5B)
Known as the 2nd most walkable neighborhood in Niagara Falls, the neighborhood of Ryerson targets both students from Ryerson University & tourists. 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$1,800 | C$2,773 | 73% | C$142 |
| 2-bedrooms | C$2,100 | C$2,865 | 65% | C$188 |
| 3-bedrooms | C$2,400 | C$3,821 | 60% | C$353 |
This area has a total of 91 Airbnb listings with 37 private room properties and 36 one-bedroom properties. The monthly revenue for most properties in Ryerson is more than C$3,025 per month with occupancy being more than 54%.
3. Corwin (L2G)
This neighborhood is generally great for all kinds of households and there’s a solid 42% of renters among those who are living in the area. 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$1,500 | C$2,127 | 66% | C$164 |
| 2-bedrooms | C$1,950 | C$3,077 | 73% | C$189 |
| 3-bedrooms | C$2,195 | C$3,568 | 62% | C$239 |
This area has a total of 32 Airbnb listings with 9 private room properties and 14 one-bedroom properties. The monthly revenue for most properties in Corwin is more than C$1,789 per month with occupancy being more than 45%.
Short-term rental regulations in Niagara Falls
To begin with, it’s certainly important to be familiar with the Airbnb rules in Niagara Falls to make sure that your business will run smoothly. Here are some of the short-term rental regulations and ordinances to take note of:
- A licensed Bed and Breakfast (BNB) is permitted with an owner occupied detached dwelling (or dwelling unit of a duplex or semi-detached dwelling), where these dwellings are permitted in residential and commercial zones, subject to the regulations contained in By-law No. 2018-91.
- Operators of Vacation Rental Units and Bed and Breakfasts are to be in possession of an active license to operate. Applications for Vacation Rental Units and Bed & Breakfasts can be found on the Business Licensing Page.
- Council passed a bylaw to allow a bed and breakfast of up to three bedrooms in an owner-occupied dwelling unit in three residential zones and up to four bedrooms in the River Road district.
- The new bylaw establishes new contemporary definitions, operational rules and inspection requirements which must be met before opening.
- Under the new bylaw, these licences remain the property of the city and are non-transferrable. In addition, any operator who receives three violation notices will have their licence suspended. Anyone caught operating without a licence would be subject to a chargeable offence.
- The city requires a $65 fee per year for a tourist-home licence. A new annual fee of $500 will be required for a new vacation rental unit or bed and breakfast licence (or change of ownership), and an annual fee of $250 for the renewal of any existing licence.
Rental Properties in Niagara Falls
The largest market for tourists in Ontario is Niagara Falls with over 12.95 million annual visitors! According to local news, rental properties in Niagara are skyrocketing, with a 25.5% increase in just three years.
To run an Airbnb rental arbitrage in Canada, you can look at property websites and get a grasp of the ranging prices in Victoria:
1. Point 2 Homes
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!
