Last updated on August 17th, 2023
Airbnb Rental Arbitrage in Washington: Discover how to do Airbnb rental arbitrage in Washington. This strategy is for entrepreneurs subletting rented properties to guests.
Discover how to do Airbnb rental arbitrage in Washington. This strategy is for entrepreneurs subletting rented properties to guests.
- Last updated on
- August 17, 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 Washington, 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 Washington, Douglas manages 17 listings and there’s a huge possibility that he doesn’t own all the properties. He has made $1,329,909 in the last 12 months.
Is Rental Arbitrage Profitable in Washington?
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 Columbia Heights, which is popular due to its shopping districts and diverse community.
Using Airbtics’ income generator, you can easily discover that rental arbitrage in Washington is profitable.
Profit & Monthly Expense in Washington
Based on Airbtics’ data, you can earn a whopping $7,113 per month for a 3-bedroom apartment in Columbia Heights alone. With the data provided, you can certainly tell that investing in a property in Washington is profitable.
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|||
|---|---|---|---|
| Average Rent Price | Airbnb Monthly Revenue | Monthly Expense | Monthly Profit |
| $3,872 | $7,113 | $1,423 | $1,818 |
Airbnb Dataset
- Average Rent Price: $3,872
- Airbnb Monthly Revenue: $7,113
- Monthly Expense: $1,423
- Monthly Profit: $1,818
Source: Airbtics dashboard
The monthly profit can be calculated by subtracting the Airbnb monthly revenue, the rental price, and the monthly expenses ($7,113 – $3,872 – $1,423 = $1,818).
Startup Cost in Washington
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 |
| $9,744 | 5.4 months |
Total Startup Cost (Average startup cost + 2 months rent price):
$9,744
Cash Return Time:
5.4 months
The average estimated startup cost (for furnishing) in Washington is around $2,000. To compute the total startup cost, it is necessary to add the 2 months of average rent price ($7,744). Now that we have a total startup cost of $9,744, cash return time can be calculated by dividing this by the monthly profit ($1,818).
Given your monthly revenue of $1,818, it will take approximately 5.4 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 Washington.
Best Areas for Rental Arbitrage in Washington
Before investing in a particular area in Washington, 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 Washington ranked by their annual revenue, along with their occupancy & daily rates!
1. Capitol Hill
Capitol Hill has interesting landmarks including the Library of Congress, Washington Navy Yard, and Barracks Row. Investors who wish to target historians, tourists, & students should consider this suburb. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Capitol Hill:
|
|
||||
|---|---|---|---|---|
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
| 1 bedroom | $2,000 | $3,803 | 88% | $170 |
| 2-bedroom | $2,800 | $5,194 | 87% | $267 |
| 3-bedroom | $4,075 | $5,865 | 91% | $413 |
Type of Bedrooms
Airbnb Dataset
🛏️ 1 bedroom
- Average Rent Price: $2,000
- Average Airbnb Revenue: $3,803
- Occupancy Rate: 88%
- Average Daily Rate: $170
🛏️ 2-bedrooms
- Average Rent Price: $2,800
- Average Airbnb Revenue: $5,194
- Occupancy Rate: 87%
- Average Daily Rate: $267
🛏️ 3-bedrooms
- Average Rent Price: $4,075
- Average Airbnb Revenue: $5,865
- Occupancy Rate: 91%
- Average Daily Rate: $413
According to our Airbtics Dashboard, there are more than 225 Airbnb listings with 31 condo properties and 111 one-bedroom properties in this area. The monthly revenue for most properties in Capitol Hill is more than $3,806 per month with occupancy being more than 77%.
2. Bloomingdale
This neighborhood in Washington consists of Victorian houses and great restaurants and offers an amazing nightlife experience. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Bloomingdale:
|
|
||||
|---|---|---|---|---|
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
| 1 bedroom | $1,695 | $2,892 | 91% | $130 |
| 2-bedroom | $2,375 | $5,431 | 90% | $208 |
| 3-bedroom | $3,750 | $6,601 | 79% | $328 |
Type of Bedrooms
Airbnb Dataset
🛏️ 1 bedroom
- Average Rent Price: $1,695
- Average Airbnb Revenue: $2,892
- Occupancy Rate: 91%
- Average Daily Rate: $130
🛏️ 2-bedrooms
- Average Rent Price: $2,375
- Average Airbnb Revenue: $5,431
- Occupancy Rate: 90%
- Average Daily Rate: $208
🛏️ 3-bedrooms
- Average Rent Price: $3,750
- Average Airbnb Revenue: $6,601
- Occupancy Rate: 79%
- Average Daily Rate: $328
This area has a total of 80 Airbnb listings with 19 private room properties and 36 one-bedroom properties. The monthly revenue for most properties in Bloomingdale is more than $2,680 per month with occupancy being more than 73%.
3. Columbia Heights
Columbia Heights is one of the most coveted neighborhoods with diverse communities. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Columbia Heights:
|
|
||||
|---|---|---|---|---|
| Type of Bedrooms | Average Rent Price | Average Airbnb Revenue | Occupancy Rates | Average Daily Rate |
| 1 bedroom | $1,922 | $2,864 | 88% | $135 |
| 2-bedroom | $2,300 | $3,702 | 89% | $173 |
| 3-bedroom | $3,872 | $7,113 | 90% | $299 |
Type of Bedrooms
Airbnb Dataset
🛏️ 1 bedroom
- Average Rent Price: $1,922
- Average Airbnb Revenue: $2,864
- Occupancy Rate: 88%
- Average Daily Rate: $135
🛏️ 2-bedrooms
- Average Rent Price: $2,300
- Average Airbnb Revenue: $3,702
- Occupancy Rate: 89%
- Average Daily Rate: $173
🛏️ 3-bedrooms
- Average Rent Price: $3,872
- Average Airbnb Revenue: $7,113
- Occupancy Rate: 90%
- Average Daily Rate: $299
This area has a total of 140 Airbnb listings with 40 private room properties and 54 one-bedroom properties. The monthly revenue for most properties in Columbia Heights is more than $2,182 per month with occupancy being more than 63%.
Short-term rental regulations in Washington
To begin with, it’s certainly important to be familiar with the Airbnb rules in Washington to make sure that your business will run smoothly. Here are some of the short-term rental regulations and laws to take note of:
- In order to operate a short-term or vacation rental in the District, the property must be owned by an individual, and serve as a homeowner’s primary residence – with the owner being eligible to receive the Homestead Tax Deduction.
- Short-term rentals are allowed to operate in any neighborhood or zone in the District as long as the host has a valid Short-Term or Vacation Rental License.
- If the rental is a co-op, condo, or if the property is in a community where there is a homeowners’ association, the owner must attest that the bylaws, house rules, or other governing documents of the homeowner/condo/ cooperative governing board or association allow short-term and/or vacation rentals.
- A Certificate of Clean Hands issued within the last 30 days in the property owner’s name must be obtained from the Office of Tax and Revenue.
Rental Properties in Washington
To run an Airbnb rental arbitrage in Washington, you can look at property websites and get a grasp of the ranging prices:
1. Zillow
2. Homes
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!
Short-Term Rental Data
Short-Term Rental Data
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