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 Norfolk, 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 Norfolk, Leticia manages 20 listings and I’m pretty sure she doesn’t own the all properties. She made £723,507 in the last 12 months.
How much can I make with rental arbitrage in Norfolk?
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 borough to invest in is Norfolk City Centre located in the NR2 district because of the business professionals & students in the city!
Norfolk City Centre is attractive for property investors because of its close proximity to universities and business buildings. Now that we have the best neighborhood to invest in Norfolk, let’s talk about profitability and monthly expenses.
Profit & Monthly Expense in Norfolk
Based on Airbtics’ data, you can earn a whopping £2,513 per month for a studio-type bedroom in Norfolk City Centre alone. With the data provided, you can certainly tell that investing in a property in Norfolk is profitable!
| Average Rent Price | Airbnb Monthly Revenue | Monthly Expense | Monthly Profit |
|---|---|---|---|
| £820 | £2,513 | £503 | £1,190 |
Source: Airbtics dashboard
The monthly profit can be calculated by subtracting the Airbnb monthly revenue, the rental price and monthly expense (£2,513-£820-£503 = £1,190).
Startup Cost in Norfolk
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 |
|---|---|
| £3,640 | 3.1 months |
The average estimated startup cost (for furnishing) in Norfolk is around £2,000. To compute the total startup cost, it is necessary to add the 2 months of average rent price (£1,640). Now that we have a total startup cost of £3,640, cash return time can be calculated by dividing this by the monthly profit (£1,190).
Given your monthly revenue of £1,190, it will take approximately 3.1 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 Norfolk!
Best Areas for Rental Arbitrage in Norfolk
Before investing in a particular area in Norfolk, 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 neighbourhoods in Norfolk ranked by their annual revenue, along with their occupancy & daily rates!
1. Norfolk City Centre (L14)
This borough is one of the largest employment areas in Europe, hence, it is home to business executives and professionals! Here’s what you can expect in this neighbourhood:
| Type of Bedrooms | Average Rent Price (pcm) | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| Studio Type Apartment | £820 | £2,513 | 66% | £102 |
| 2-bedrooms | £871 | £1,217 | 64% | £130 |
| 3-bedrooms | £1,090 | £1,641 | 77% | £191 |
According to our Airbtics Dashboard, there are more than 31 Airbnb listings with 3 private room properties and 23 one-bedroom properties in this area. The monthly revenue for most properties in Norfolk City Centre is more than £328 per month with occupancy being more than 48%.
2. Great Yarmouth (NR29)
If you are looking for cheap buy-to-let properties in Norfolk, Great Yarmouth is the best place to invest in! With yields ranging from 4.9 – 5.4%, this area often attracts vacationers from all over the world. 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 | £550 | £1,698 | 62% | £125 |
| 2-bedrooms | £701 | £1,592 | 60% | £127 |
| 3-bedrooms | £808 | £1,977 | 56% | £163 |
This area has a total of 1,788 Airbnb listings with 197 private room properties and 510 one-bedroom properties. The monthly revenue for most properties in Great Yarmouth is more than £808 per month with occupancy being more than 49%.
3. Riverside, Norwich (NR1)
Last but not least, Riverside is a more affordable area! It is considered an excellent choice for property investment in Norfolk because this area is only a few meters from the town centre, making it accessible for family buyers and student tenants. 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 | £843 | £1,749 | 73% | £96 |
| 2-bedrooms | £1,236 | £2,740 | 74% | £150 |
| 3-bedrooms | £1,730 | £3,509 | 65% | £183 |
This area has a total of 124 Airbnb listings with 49 private room properties and 77 one-bedroom properties in this area. The monthly revenue for most properties in Riverside is more than £1,077 per month with occupancy being more than 51%.
Short-term rental regulations in Norfolk
To begin with, it’s certainly important to be familiar with the Airbnb rules in Norfolk to make sure that your business will run smoothly. Here are some of the short-term rental regulations and laws to take note of:
- If the total of all lettings that exceed 31 continuous days is more than 155 days during the year, then your property will not continue to be a Furnished Holiday Let for that year.
- Your property must be available for letting as furnished holiday accommodation letting for at least 210 days in the year. The creation of a six-month tenancy would compromise this regulation.
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!
