Last updated on September 4th, 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 Perth, 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 Perth, Phoebe manages 61 listings and I’m pretty sure she doesn’t own all the properties. Overall, she made A$2,936,779 in the last 12 months.
Is Rental Arbitrage Profitable in Perth?
In order to start a rental arbitrage in Australia, particularly in Perth, it’s primarily important to take note of the overall cost & potential revenue.
For instance, the best neighborhood to invest in is East Perth, which is a laid-back inner suburb in West Australia with a popular waterfront. Using Airbtics’ income generator, you can easily distinguish that rental arbitrage in Perth is profitable.
Profit & Monthly Expense in Perth
Based on Airbtics’ data, you can earn a whopping A$6,477 per month for a 3-bedroom apartment in East Perth alone. With the data provided, you can certainly tell that investing in a property in Perth is profitable.
| Average Rent Price | Airbnb Monthly Revenue | Monthly Expense | Monthly Profit |
|---|---|---|---|
| A$3,433 | A$6,477 | A$1,295 | A$1,749 |
Source: Airbtics dashboard
The monthly profit can be calculated by subtracting the Airbnb monthly revenue, the rental price, and the monthly expenses (A$6,477 – A$3,433 – A$1,295 = A$1,749).
Startup Cost in Perth
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$8,866 | 5.1 months |
The average estimated startup cost (for furnishing) in Perth is around A$2,000. To compute the total startup cost, it is necessary to add the 2 months of average rent price (A$6,866). Now that we have a total startup cost of A$8,866, cash return time can be calculated by dividing this by the monthly profit (A$1,749).
Given your monthly revenue of A$1,749, it will take approximately 5.1 months time to get back the startup cost in Perth.
In such a brief 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 Perth.
Best Areas for Rental Arbitrage in Perth
Before investing in a particular area in Perth, 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 Perth ranked by their annual revenue, along with their occupancy & daily rates!
1. East Perth
East Perth offers incredible views with seafood restaurants and green spaces that are perfect for all kinds of travelers. Check out the Airbnb data such as the average revenue, occupancy rates, and more in East Perth:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | A$1,825 | A$3,128 | 80% | A$149 |
| 2-bedrooms | A$2,824 | A$4,539 | 84% | A$194 |
| 3-bedrooms | A$3,433 | A$6,477 | 81% | A$300 |
According to our Airbtics Dashboard, there are more than 142 Airbnb listings with 19 condo properties and 65 one-bedroom properties in this area. The monthly revenue for most properties in East Perth is more than A$3,604 per month with occupancy being more than 65%.
2. Rockingham
This neighborhood is a popular holiday destination with a beautiful coastline in Perth! Check out the Airbnb data such as the average revenue, occupancy rates, and more in Rockingham:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | A$1,738 | A$2,965 | 91% | A$138 |
| 2-bedrooms | A$1,955 | A$3,520 | 87% | A$167 |
| 3-bedrooms | A$2,520 | A$5,357 | 74% | A$323 |
This area has a total of 34 Airbnb listings with 6 private room properties and 10 one-bedroom property. The monthly revenue for most properties in Rockingham is more than A$3,405 per month with occupancy being more than 68%.
3. South Fremantle
This suburb in Perth has the natural charm of attracting people from Perth because of its modern culture and various chic cafes. Check out the Airbnb data such as the average revenue, occupancy rates, and more in South Fremantle:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1-bedroom | A$2,390 | A$3,365 | 86% | A$139 |
| 2-bedrooms | A$2,694 | A$4,530 | 81% | A$194 |
| 3-bedrooms | A$3,042 | A$5,799 | 80% | A$309 |
This area has a total of 70 Airbnb listings with 13 private room properties and 34 one-bedroom properties in this area. The monthly revenue for most properties in South Fremantle is more than A$3,395 per month with occupancy being more than 77%.
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Short-term rental regulations in Perth
To begin with, it’s certainly important to be familiar with the Airbnb rules in Perth to make sure that your business will run smoothly. Here are some of the short-term rental regulations and laws to take note of:
- It is required to get planning approval from the city in order legally rent your apartment or house to short-term guests on a commercial basis.
- Providers of short-term rental accommodation within Western Australia are required to register their property to operate and advertise.
- Once approved, a unique registration number should be advertised alongside the short-term rental.
- All applications will also be required to demonstrate compliance with the Disability Discrimination Act.
Rental Properties in Perth
To run an Airbnb rental arbitrage in Australia, you can look at property websites and get a grasp of the ranging prices in Perth:
1. Domain
2. Rent AU
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!
