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 Savannah, 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 Savannah, Mary manages 63 listings and there’s a huge possibility that she doesn’t own all the properties. She has made $5,868,897 in the last 12 months.
Is Rental Arbitrage Profitable in Savannah?
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 the North Historic District, which is popular for its culture, art, museums, historic monuments and forts of the Revolutionary and Civil War eras.
Using Airbtics’ income generator, you can easily discover that rental arbitrage in Savannah is profitable.
Profit & Monthly Expense in Savannah
Based on Airbtics’ data, you can earn a whopping $12,585 per month for a 3-bedroom apartment in North Historic District alone. With the data provided, you can certainly tell that investing in a property in Savannah is profitable.
| Average Rent Price | Airbnb Monthly Revenue | Monthly Expense | Monthly Profit |
|---|---|---|---|
| $4,300 | $12,585 | $2,517 | $5,768 |
Source: Airbtics dashboard
The monthly profit can be calculated by subtracting the Airbnb monthly revenue, the rental price, and the monthly expenses ($12,585 – $4,300 – $2,517 = $5,768).
Startup Cost in Savannah
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 |
|---|---|
| $10,600 | 2 months |
The average estimated startup cost (for furnishing) in Savannah is around $2,000. To compute the total startup cost, it is necessary to add the 2 months of average rent price ($8,600). Now that we have a total startup cost of $10,600, cash return time can be calculated by dividing this by the monthly profit ($5,768).
Given your monthly revenue of $5,768, it will take approximately 2 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 Savannah.
Best Areas for Rental Arbitrage in Savannah
Before investing in a particular area in Savannah, 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 Savannah ranked by their annual revenue, along with their occupancy & daily rates!
1. Metropolitan
This neighborhood is situated in the central part of Savannah where there are vast Hispanic business communities. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Metropolitan
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1 bedroom | $1,050 | $3,456 | 93% | $142 |
| 2-bedroom | $2,000 | $5,929 | 83% | $214 |
| 3-bedroom | $2,400 | $5,492 | 85% | $244 |
According to our Airbtics Dashboard, there are more than 57 Airbnb listings with 3 condo properties and 10 one-bedroom properties in this area. The monthly revenue for most properties in Metropolitan is more than $2,422 per month with occupancy being more than 80%.
2. North Historic District
The North Historic District of Savannah is one of the preferred suburbs by tourists due to the nearby attractions including the Savannah Historic, Theatre, City Market, Wright Square, and more. Check out the Airbnb data such as the average revenue, occupancy rates, and more in North Historic District:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1 bedroom | $2,690 | $6,011 | 88% | $237 |
| 2-bedroom | $3,125 | $7,910 | 85% | $310 |
| 3-bedroom | $4,300 | $12,585 | 81% | $567 |
This area has a total of 267 Airbnb listings with 25 private room properties and 129 one-bedroom property. The monthly revenue for most properties in North Historic District is more than $5,574 per month with occupancy being more than 77%.
3. Victorian District East
Known as Savannah’s most walkable neighborhood, Victorian District East offers a combination of commercial and historical architecture. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Victorian District East:
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
|---|---|---|---|---|
| 1 bedroom | $2,379 | $4,471 | 92% | $200 |
| 2-bedroom | $2,600 | $6,595 | 89% | $248 |
| 3-bedroom | $3,057 | $8,976 | 87% | $381 |
This area has a total of 60 Airbnb listings with 17 private room properties and 21 one-bedroom properties. The monthly revenue for most properties in Victorian District East is more than $4,227 per month with occupancy being more than 84%.
Short-term rental regulations in Savannah
To begin with, it’s certainly important to be familiar with the Airbnb rules in Savannah 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 secure an STVR certificate in the city
- STVRs are permitted within the short-term vacation rental overlay district, which includes the Downtown, Victorian and Streetcar local historic districts. Outside of this overlay, they are only permitted in certain Business and Agriculture zoning classifications (B-C, B-N, B-L and A-1).
- A separate application must be obtained for each property used as a STVR.
- The zoning conditions for short-term rentals in Savannah are:
1. No more than 2 adults per bedroom plus 2 adults for each rental unit
2. No change to the outside appearance of the dwelling unit or premises
3. Parking – Studio-up to 3 bedrooms: The requirement for the type of dwelling unit, 4+ bedrooms: The requirement for the type of dwelling unit, plus 1 space for every 2 additional bedrooms. - For properties rented for 90-days or less, hotel/motel taxes must be remitted on the first 30 days of the rental.
Rental Properties in Savannah
To run an Airbnb rental arbitrage in Savannah, you can look at property websites and get a grasp of the ranging prices:
1. Zillow
2. Apartments
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!
