Last updated on June 26th, 2023
Airbnb Millionaires
With over 500 million Airbnb stays worldwide in the last ten years, Airbnb has radically transformed the hotel business. Most of us have used Airbnb at some point, but you may not be aware of how much money people can make on the platform without even owning a property. It seems a little strange, like how can you rent something out on Airbnb if you don’t even own anything? It’s called rental arbitrage, and it’s something that individuals have been doing since Airbnb’s start.
What is Rental Arbitrage?
Rental Arbitrage is a method similar to house hacking. But unlike house hacking in Rental Arbitrage, you don’t own the house. Instead, you convince a landlord to lease you a property which you then furnish and sublease on Airbnb.
Apart from rental arbitrage, there are two other ways that people all around the world are making millions of dollars with Airbnb and becoming Airbnb Millionaires.
Host your own Airbnb listing
Whether it’s a real estate investment property or a holiday rental, it can range from a pull-out couch to a blow-up mattress or even a whole house.
Co-hosting
Sometimes known as the management fee model. This is a great method to get started with hosting for anyone who is just getting started. You can also rent a property, outfit it, and set it up if you have a property, or if you have some money to invest. If you don’t have any money to invest or don’t want to invest money and want to get started with Airbnb with minimal risk and maximum possibility.
But we’re going to talk about the world of Airbnb rental arbitrage, how individuals do it, and what it implies for the future of cities. As a result, you’re undoubtedly wondering how it all works. Apart from rental arbitrage, you lease an apartment for a long time and then rent it out for a short time for twice or triple the price you’re paying.
Airbnb host’s journey to an Airbnb Millionaire
After losing his job, Ta launched his Airbnb rental arbitrage business out of desperation. Ta had only a few months ago started his own mortgage company, Senior Advantage Association. But, the Department of Housing and Urban Development (HUD) announced a new rule in 2017 that changed the terms of reverse mortgages. As a result, the multibillion-dollar industry came to an end. He placed his property on Airbnb since he was broke and worried about not being able to pay his rent next month. The monthly rent for the flat was $3900; if he could have rented it for $5000, his Airbnb revenues would have covered the rent. Even after making small payments, he still had a balance of $1,100.
He quickly recognised that the strategy could earn him a lot of money, and the seed for an Airbnb arbitrage business was sown. Ta was making six figures a month from 30 listings after just nine months. Despite this, he did not own any property, unlike many other Airbnb hosts. While Ta’s company is now a big success, he admits that his path was not always easy. Re-renting on Airbnb requires a plan that includes your credit, finding a landlord and optimizing its visibility on Airbnb. He proposed the idea of Airbnb to hundreds of landlords at first and was repeatedly turned down. He recognised that much of the information he could access online after refining his technique.
Recipe for Success
Ta’s method begins with a search for a property that can make at least $2k per month after all expenditures in locations where people operate Airbnb. Figuring out how much money to invest safely while curating your search is a key roadblock for most re-renting seekers. “When I first started, a single house would cost me anywhere from $20,000 to $25,000 to repair, including the first month’s rent, security deposit, and really gorgeous furnishings.” Don’t do what everyone else is doing on Craigslist and make your listing look like a garage sale. Choose elegant furniture and pay close attention to detail, and you’ll have a real winner.” Ta remarked.
Why is it a good idea to rent out your home on Airbnb?
Renting out your home on Airbnb is a great concept because it allows you to profit from an existing asset, your home. If you put things up correctly, it can even be a fairly passive source of money that requires little to no effort on your part. This is one of the reasons why Airbnb STR is so profitable.
You can earn up to $1,000 every month on average. This number can vary depending on your location, property, and hosting abilities. If you can present your visitors with a one-of-a-kind experience. Then you might be able to make a six-figure income from your side hustle and become an Airbnb millionaire.
Conclusion
There are numerous benefits to becoming a host, but it’s important to remember that it takes time and money to do it correctly. The hosts who have an entrepreneurial mindset and treat their rental like a business often make the most money and become millionaires.
READ MORE- How much can you make on Airbnb | Airbnb Rental Arbitrage
Useful tool recommendation – Airbnb Calculator
