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 Pittsburgh, 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 Pittsburgh, Matthew manages 22 listings and there’s a huge possibility that he doesn’t own all the properties. He has made $719,794 in the last 12 months.
Is Rental Arbitrage Profitable in Pittsburgh?
Before you dive in and start putting out your hard-earned money on a property, it’s important to learn how much profit you can make. For instance, the best neighborhood to invest in is Shadyside, which is known for its eclectic shopping scene, gay clubs, craft beer spots, and upscale boutiques.
Using Airbtics’ income generator, you can easily discover that rental arbitrage in Pittsburgh is profitable.
Profit & Monthly Expense in Pittsburgh
Based on Airbtics’ data, you can earn a whopping $5,887 per month for a 3-bedroom apartment in Shadyside alone. With the data provided, you can certainly tell that investing in a property in Pittsburgh is profitable.
| Average Rent Price | Airbnb Monthly Revenue | Monthly Expense | Monthly Profit |
|---|---|---|---|
| $2,350 | $5,887 | $1,177 | $2,360 |
Source: Airbtics dashboard
The monthly profit can be calculated by subtracting the Airbnb monthly revenue, the rental price, and the monthly expenses ($5,887 – $2,350 – $1,177 = $2,360).
Startup Cost in Pittsburgh
Now that you have an overview of how much your monthly expense & revenue, 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 |
|---|---|
| $6,700 | 3 months |
The average estimated startup cost (for furnishing) in Pittsburgh is around $2,000. To compute the total startup cost, it is necessary to add the 2 months of average rent price ($4,700). Now that we have a total startup cost of $6,700, cash return time can be calculated by dividing this by the monthly profit ($2,360).
Given your monthly revenue of $2,360, 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 Pittsburgh.
Best Areas for Rental Arbitrage in Pittsburgh
Before investing in a particular area in Pittsburgh, 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 Pittsburgh ranked by their annual revenue, along with their occupancy & daily rates!
1. Bloomfield
This neighborhood is popular for its hip scene and Italian-American heritage. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Bloomfield:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1 bedroom | $1,000 | $2,473 | 85% | $105 |
| 2-bedroom | $1,379 | $2,967 | 89% | $144 |
| 3-bedroom | $1,725 | $4,738 | 73% | $173 |
According to our Airbtics Dashboard, there are more than 59 Airbnb listings with 2 condo property and 35 one-bedroom properties in this area. The monthly revenue for most properties in Bloomfield is more than $2,603 per month with occupancy being more than 74%.
2. Shadyside
Considered one of the safest neighborhoods in Pittsburgh, Shadyside has close proximity to high-end schools and the majority of renters are international students. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Shadyside:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1 bedroom | $1,395 | $2,483 | 87% | $117 |
| 2-bedroom | $1,845 | $2,568 | 86% | $197 |
| 3-bedroom | $2,350 | $5,887 | 84% | $653 |
This area has a total of 33 Airbnb listings with 5 private room properties and 17 one-bedroom property. The monthly revenue for most properties in Shadyside is more than $2,262 per month with occupancy being more than 72%.
3. Lawrenceville
Lawrenceville is known for its beautiful thriving art galleries and offers an exciting nightlife experience. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Lawrenceville:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1 bedroom | $1,200 | $2,331 | 84% | $106 |
| 2-bedroom | $1,845 | $3,407 | 84% | $185 |
| 3-bedroom | $2,625 | $4,445 | 68% | $278 |
This area has a total of 59 Airbnb listings with 9 private room properties and 28 one-bedroom properties. The monthly revenue for most properties in Lawrenceville is more than $2,417 per month with occupancy being more than 68%.
Short-term rental regulations in Pittsburgh
To begin with, it’s certainly important to be familiar with the Airbnb rules in Pittsburgh to make sure that your business will run smoothly. To date, there are currently no strict short-term rental regulations in Pittsburgh. However, Pittsburgh Council has proposed the following regulations this year which indicated the following:
1. Council legislation would require short-term rental operators to be licensed by the city and renew annually.
2. Owners would have to keep records of anyone who entered the property and establish a contact person available to authorities in an emergency.
3. The proposed policy also included a limit of how long a guest could stay to 15 days.
Rental Properties in Pittsburgh
To run an Airbnb rental arbitrage in Pittsburgh, you can look at property websites and get a grasp of the ranging prices:
1. Coldwell Banker Realty
2. Realtor
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!
