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Airbnb Rental Arbitrage All About Airbnb

Airbnb Rental Arbitrage in Devon

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 Devon, its profitability, and 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 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 Devon, Emilie manages 26 listings and I’m pretty sure she doesn’t own the all properties. She made £ 1,788,855 in the last 12 months.  

Devon airbnb rental arbitrage

How much can I make with rental arbitrage in Devon?

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 Torquay located in the CF24 district with a possibility of a 9.27% yield!

Torquay is popular with investors for the excellent value of buy-to-lets because of the perfect combinations: tourist & retirement properties! Now that we have the best neighborhood to invest in Devon, let’s talk about profitability and monthly expenses.

Devon airbnb rental arbitrage
Profit & Monthly Expense in Devon 

Based on Airbtics’ data, you can earn a whopping £4,812 per month for a 2-bedroom apartment in Torquay alone. With the data provided, you can certainly tell that investing in a property in Devon is profitable!

Average Rent Price Airbnb Monthly Revenue Monthly Expense Monthly Profit
£1,406 £2,132 £426 £300

Source: Airbtics dashboard

The monthly profit can be calculated by subtracting the Airbnb monthly revenue, the rental price and the monthly expenses (£2,132-£1,406-£426= £300).

 Startup Cost in Devon

Now that you have an overview of how much your monthly expense and revenue is, let’s talk about the start-up cost! How long does it take for an investor like you 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
£4,812 16.1 months

The average estimated startup cost (for furnishing) in Devon is around £2,000. To compute the total startup cost, it is necessary to add the 2 months of average rent price (£2,818). Now that we have a total startup cost of £4,812, cash return time can be calculated by dividing this by the monthly profit (£300).

Given your monthly revenue of £300, it will take approximately 16.1 months time to get back the startup cost! After this 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 Devon!

Best Areas for Rental Arbitrage in Devon

Before investing in a particular area in Devon, you have to take a look at the top markets and number of listings to set your expectations for success. Check out the top 3 neighbourhoods in Devon ranked by their annual revenue, along with their occupancy & daily rates!

1. Torquay (TQ1)

This neighborhood offers competitive property prices, however, this in return will mean exciting yields for property investors! Here’s what you can expect in this neighbourhood:

Type of Bedrooms Average Rent Price (pcm) Average Airbnb Revenue Occupancy Rates Average Daily Rate
1-bedroom £817 £1,200 55% £133
2-bedrooms £1,406 £2,132 55% £206
3-bedrooms £1,334 £2,183 56% £269

According to our Airbtics Dashboard, there are more than 161 Airbnb listings with 17 private room properties and 70 one-bedroom properties in this area. The monthly revenue for most properties in Torquay is more than £1,983 per month with occupancy being more than 40%.

2. Exeter (EX1)

Exeter has the sixth-highest employment level in the country, therefore catering to professionals across various industries! The rental growth in this neighborhood is also consistently emerging, with yields around 3-4%. Here’s what you can expect in this neighbourhood:

Type of Bedrooms Average Rent Price (pcm) Average Airbnb Revenue Occupancy Rates Average Daily Rate
1-bedroom £1,029 £1,929 72% £126
2-bedrooms £1,303 £2,858 72% £165
3-bedrooms £1,694 £3,268 73% £215

This area has a total of 298 Airbnb listings with 101 private room properties and 165 one-bedroom properties. The monthly revenue for most properties in Exeter is more than £1,989 per month with occupancy being more than 50%.

3. Plymouth (PL1)

Last but not least, one of the cheap property hotspots in any southwest city, Plymouth! This area is also perfect for investors because of the student and tourist rental demands. Here’s what you can expect in this neighbourhood:

Type of Bedrooms Average Rent Price (pcm) Average Airbnb Revenue Occupancy Rates Average Daily Rate
1-bedroom £720 £1,184 58% £115
2-bedrooms £730 £1,292 60% £195
3-bedrooms £853 £2,666 53% £215

This area has a total of 108 Airbnb listings with 17 private room properties and 38 one-bedroom properties in this area. The monthly revenue for most properties in Plymouth is more than £1,659 per month with occupancy being more than 39%.

how much can you make on airbnb

Short-term rental regulations in Devon

To begin with, it’s certainly important to be familiar with the Airbnb rules in Devon to make sure that your business will run smoothly. Here are some of the short-term rental regulations and laws to take note of:

  • The Council of Devon will regard bed and breakfast hotels as HMOs if they are housing any people who use the hotel as their main residence for more than 30 consecutive days. Where this accommodation is used as the main residence, the same standards as for other HMOs should be met.
  • Homeowners in Devon are allowed to rent out their properties for short-term lets without planning permission for up to 90 nights a year.

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:

  1. 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:

  1. 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:

  1. 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!

Airbtics
Categories
Airbnb Rules All About Airbnb

Airbnb Rules in Devon

Devon Airbnb Rules: Do you need help with Airbnb property investment and rules in Devon? Here’s a helpful guide for hosts and investors in the UK!

Airbnb Rules in Devon

Devon airbnb rules

Airbnb Rules in Devon

Do you need help with Airbnb property investment and rules in Devon? Here’s a helpful guide for hosts and investors in the UK!

If you are looking to buy investment properties in the UK, knowing the Airbnb rules in your preferred city is the first step! In this article, we featured Airbnb regulations in Devon along with short-term let policies, buy to let properties, things to consider in property investment, and more. Continue reading and learn more about the Airbnb rules in Devon!

Is Airbnb legal in Devon? 

Don’t worry, Airbnb is legal in Devon! This diverse county is located in southwest England and is well-known as a top-notch holiday destination. Devon offers some of England’s most stunning natural landscapes, as well as a variety of great cultural and historical attractions.

Here is a little proof! As of May 2022, there are 113,237 nights available in Devon from Airbnb alone. Cottages,Com manages 558 listings, Marsdens Devon Cottages and Luxury Coastal operate 108 and 76 respectively. 

How much can I make by running an Airbnb in Devon?

Currently, there are 6,259 Airbnb listings in Devon, with 77% of entire houses earning up to £2,693 a month. The Average Occupancy Rate in Devon is 48% and the average daily rate is £181. According to short-term rental data source Airbtics, a 2-bedroom apartment in Devon can make up to £30,835 each year. Check out our Short-Term Rental Profit Calculator to know how much can you make on Airbnb! 

Devon airbnb rules
Short-term rental policy in Devon
  • The Council of Devon will regard bed and breakfast hotels as HMOs if they are housing any people who use the hotel as their main residence for more than 30 consecutive days. Where this accommodation is used as the main residence, the same standards as for other HMOs should be met.
  • Homeowners in Devon are allowed to rent out their properties for short-term lets without planning permission for up to 90 nights a year.

Investment Property in Devon

If you are looking to start an Airbnb business in the UK, this is your go signal to do so! Before investing in a property in Devon, you have to consider the major determinators for success. This includes average price, population, nearby landmarks or attractions, and rental yields to expect – among the rest. Here are the recent property prices in Devon:

Devon airbnb rules

Source: Buying Property in Devon

 

Here are some of the most recommended areas in Devon that you can look into & consider purchasing:

airbtics-logo-300x87
Area Population Average House Price Average Rent Price (pcm) Average Airbnb Revenue Yields
Exeter 130,000 £261,808 £1,396 £1,989 Yields in Exeter itself are typically around 3% to 4%
Plymouth 234,900 £224,529 £690 £1,659 Yields are tight at around 3% (based on BS8 postcode)
Torquay 65,200 £259,944 £1,233 £1,983 These areas offer yields around 4% in BS7 and BS9, although BS6 could return 6-7%, particularly for a student let

Airbnb Location

Dataset

Exeter

  • Population: 130,000
  • Average House Price: £261,808
  • Average Rent Price (pcm): £1,396
  • Average Airbnb Monthly Revenue: £1,989
  • Yields: Yields in Exeter itself are typically around 3% to 4%

Plymouth

  • Population: 234,900
  • Average House Price: £224,529
  • Average Rent Price (pcm): £690
  • Average Airbnb Monthly Revenue: £1,659
  • Yields: Yields are tight at around 3% (based on BS8 postcode)

Torquay

  • Population: 65,200
  • Average House Price: £259,944
  • Average Rent Price (pcm): £1,233
  • Average Airbnb Monthly Revenue: £1,983
  • Yields: These areas offer yields around 4% in BS7 and BS9, although BS6 could return 6-7%, particularly for a student let

Rental Properties in Devon

Buying a property in Devon with an impressive rental yield is an excellent way to have a passive income. According to County Homesearch, Devon is widely considered one of the best areas to buy a holiday home in the UK because of its proximity to beautiful national parks (Dartmoor & Exmoor). By looking at the following property investment websites such as Stephens Scown and Bruton Knowles, you can get a grasp of the various prices in Devon.

Rental Property in South Devon

Based on a recent property analysis in Devon, its coastal towns have increased prices in all of England. Over the last year, the average house prices in South Devon is at £279,694. As seen on this rental property in South Devon, you can rent a property for as low as £620.

buy-to-let
Rental Property in Paignton

Paignton is the safest major town in Devon according to UK’s official crime rate. However, the towns of Paignton & Goodrington are among the fastest-rising house prices in Devon with an 11% increase in asking price. As seen on this rental property in Paignton, you can rent a property ranging from £975 – £1,400.

Devon airbnb rules
Rental Property in Torquay

Torquay has recorded a compound growth rate of 9% over the past few years. Known as a popular tourist & retirement property, Torquay is popular with investors for its excellent value buy-to-lets and house shares. The average house price in this town is £201,893. As seen on this rental property in Torquay, you can rent a property for as low as £850.

Devon airbnb rules

Conclusion 

In my personal opinion, the biggest advantage of running a short-term rental is high return! I’ve talked to hundreds of Airbnb hosts over the past years and frequently met hosts making 15 – 30% gross rental yields, and 10-20% net. It’s also fun to do! 

Unlock Worldwide
Short-Term Rental Data
Find unsaturated neighborhoods with the highest occupancy history.

Unlock Worldwide
Short-Term Rental Data
Find unsaturated neighborhoods with the highest occupancy history.

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