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Airbnb Rental Arbitrage All About Airbnb

Airbnb Rental Arbitrage in Santa Barbara

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 Santa Barbara, 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 Santa Barbara, Cody manages 17 listings and there’s a huge possibility that he doesn’t own all the properties. He has made $1,492,424 in the last 12 months.  

Santa Barbara airbnb rental arbitrage

Is Rental Arbitrage Profitable in Santa Barbara?

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 Downtown Santa Barbara where an average host can earn $10,313 monthly for a 3-bedroom apartment.

Using Airbtics’ income generator, you can easily discover that rental arbitrage in Santa Barbara is profitable.

Santa Barbara airbnb rental arbitrage
Profit & Monthly Expense in Santa Barbara

Based on Airbtics’ data, you can earn a whopping $18,537 per month for a 3-bedroom apartment in Downtown Santa Barbara alone. With the data provided, you can certainly tell that investing in a property in Santa Barbara is profitable.

Average Rent Price Airbnb Monthly Revenue Monthly Expense Monthly Profit
$4,517 $18,537 $3,707 $10,313

Source: Airbtics dashboard

The monthly profit can be calculated by subtracting the Airbnb monthly revenue, the rental price, and the monthly expenses ($18,537 – $4,517 – $3,707 = $10,313).

 Startup Cost in Santa Barbara

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
$11,034 1.1 month

The average estimated startup cost (for furnishing) in Santa Barbara is around $2,000. To compute the total startup cost, it is necessary to add the 2 months of average rent price ($9,034). Now that we have a total startup cost of $11,034, cash return time can be calculated by dividing this by the monthly profit ($10,313). 

Given your monthly revenue of $10,313, it will take approximately 1.1 month 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 Santa Barbara.

Best Areas for Rental Arbitrage in Santa Barbara

Before investing in a particular area in Santa Barbara, 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 boroughs in Santa Barbara ranked by their annual revenue, along with their occupancy & daily rates!

1. Downtown Santa Barbara

Downtown Santa Barbara is best known for its shopping districts and antique stores. The distinctive architecture in this neighborhood attracts most tourists to revisit Santa Barbara. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Santa Barbara:

Type of Bedrooms Average Rent Price Average Airbnb Revenue Occupancy Rates Average Daily Rate
1 bedroom $3,019 $6,523 92% $302
2-bedroom $3,540 $11,607 91% $479
3-bedroom $4,517 $18,537 89% $781

According to our Airbtics Dashboard, there are more than 155 Airbnb listings with 14 condo property and 3 one-bedroom properties in this area. The monthly revenue for most properties in Downtown Santa Barbara is more than $7,593 per month with occupancy being more than 80%.

2. Oak Park

This neighborhood in Santa Barbara has great access to public transportation and is often preferred by travelers with families. Check out the Airbnb data such as the average revenue, occupancy rates, and more in Oak Park:

Type of Bedrooms Average Rent Price Average Airbnb Revenue Occupancy Rates Average Daily Rate
1 bedroom $2,523 $5,847 95% $296
2-bedroom $2,950 $9,668 92% $399
3-bedroom $3,500 $12,902 86% $600

This area has a total of 84 Airbnb listings with 28 private room properties and 31 one-bedroom property. The monthly revenue for most properties in Oak Park is more than $5,646 per month with occupancy being more than 82%.

3. East Mesa

East Mesa is a perfect area for investors who prefer to invest in a property by the sea in Santa Barbara. This neighborhood’s upscale coastal living is friendly and has plenty of public green spaces. Check out the Airbnb data such as the average revenue, occupancy rates, and more in East Mesa:

Type of Bedrooms Average Rent Price Average Airbnb Revenue Occupancy Rates Average Daily Rate
1 bedroom $2,200 $7,648 92% $421
2-bedroom $4,762 $10,724 95% $666
3-bedroom $5,600 $12,410 96% $894

This area has a total of 28 Airbnb listings with 4 private room properties and 9 one-bedroom properties. The monthly revenue for most properties in East Mesa is more than $9,385 per month with occupancy being more than 86%.

how much can you make on airbnb

Short-term rental regulations in Santa Barbara

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

  • If your unit is within an R-4, Commercial (C), or Manufacturing (M) zone, you can register with the City and get a business license.
  • Short-term vacation rentals are unlawful in Santa Barbara, including in the coastal zone, unless they are permitted by the City and are located within zoning districts that allow for hotels or motels.
    The City will not issue business licenses for unpermitted STRV’s outside of the Coastal Zone.

Rental Properties in Santa Barbara

There are plenty of best places to Airbnb in California, particularly in Santa Barbara. Here are the ranging prices of rental properties in Santa Barbara:

1. Realtor
sublet in Santa Barbara
2. Compass
sublet in Santa Barbara

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
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Airbnb Rules All About Airbnb

Airbnb Rules in Santa Barbara

Are you looking to invest in an Airbnb property in California? If you have chosen Santa Barbara in particular, then you’re on the right track. 

There’s no doubt that the best places to Airbnb in California are generating thousands of dollars which catches the attention of property owners and investors. In addition to this, Santa Barbara offers various investment opportunities that one should not miss out on.

Continue reading to learn more about Airbnb rules in Santa Barbara and check out the profitability in this city.

Is Airbnb legal in Santa Barbara? 

Let’s cut the story short: Yes, Airbnb is certainly legal in Santa Barbara! This city is popular for its Mediterranean-style properties with attractions such as the Cold Spring Tavern, County Courthouse, Old Mission Santa Barbara,, and more.

Here is a little proof! As of July 2022, there are 3,202 nights available in Santa Barbara from Airbnb alone. Paradise Retreats manages 34 listings, while Vacation Rentals and Cody operate 28 and 17 respectively.

How much can I make by running an Airbnb in Santa Barbara?

Currently, there are 781 Airbnb listings in Santa Barbara, with 69% of entire houses earning up to $7,990 a month. The Average Occupancy Rate in Santa Barbara is 82% and the average daily rate is $283. According to vacation holiday properties data source Airbtics, a 2-bedroom apartment in Santa Barbara can make up to $111,380 each year. Check out our Airbnb Income Estimator!

Santa Barbara airbnb rules
What Are The Short-term Rental Accommodation Policies in Santa Barbara?
  • If your unit is within an R-4, Commercial (C), or Manufacturing (M) zone, you can register with the City and get a business license.
  • Short-term vacation rentals are unlawful in Santa Barbara, including in the coastal zone, unless they are permitted by the City and are located within zoning districts that allow for hotels or motels. 
  • The City will not issue business licenses for unpermitted STRVs outside of the Coastal Zone.
how much can you make on airbnb

Is Santa Barbara A Profitable Area to Invest In?

If you’re worried about spending thousands of bucks to purchase a property, the good news is you have the option of not owning one. This is because there are many property investors who enjoy doing rental arbitrage in Santa Barbara as a passive income!

Based on a recent report about rental arbitrage in California, Santa Barbara is the second-best market to start an Airbnb business with potential monthly revenue of $7,361 and a steady occupancy rate of 68%. These Airbnb metrics are important in order to expect potential revenue and avoid losing hard-earned money. Before starting an Airbnb business, getting to know your preferred area’s occupancy rates, average daily rates, and annual revenue is important to achieve success.

By using an accurate short-term rental calculator, you’ll be able to confirm if Santa Barbara is a good place for investment! In the digital era, it’s easy to discover your estimated annual revenue and high-return investment opportunities in Santa Barbara.

Santa Barbara airbnb rules

Source: Airbtics Dashboard

Rental Market in Santa Barbara 2022

Based on a recent report on the rental market trend in Santa Barbara, rent price has increased by $250 in comparison to the previous year. Despite this fact, more and more tenants are still interested in renting properties for passive income in Santa Barbara.

Santa Barbara airbnb rules

Source: Rental Price Trend in Santa Barbara

Profitable Neighborhoods in Santa Barbara 

Here are some of the most recommended neighborhoods that you can look into & consider purchasing based on Airbtics estimator:

Suburbs Average House Price (2bd apartments) Average Rent Price Average Airbnb Revenue
Santa Barbara Downtown $869,000 $3,540 $11,607
Oak Park $1.3M $2,950 $9,668
East Mesa $965,000 $4,762 $10,724

Source for Property Price: Properties in Santa Barbara

Conclusion 

In general, considering the Airbnb rules & regulations in Santa Barbara will help your Airbnb business to run smoothly! Aside from the fact that this is a passive income for various hosts, starting an Airbnb business is also a way to enjoy life and connect with new people from all over the world. Try Airbtics now and make the wisest investment decisions!

Airbtics
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Airbnb Investment All About Airbnb

10 Best Places to Airbnb in California: With Free Airbnb Data

Best Places to Airbnb in California: Looking for the best profitable Airbnb areas in California? Check out the top cities & neighborhoods where property investors are targetting!

10 Best Places to Airbnb in California: With Free Airbnb Data

10 Best Places to Airbnb in California: With Free Airbnb Data

Looking for the best profitable Airbnb areas in California? Check out the top cities & neighborhoods where property investors are targetting!

Before investing in a property in California, it’s important to analyze your options and gauge your profitability based on Airbnb’s key metrics. In this article, we’ll feature the top 10 best areas for Airbnb in California along with their respective occupancy rates, monthly & yearly revenue, average daily rates (ADRs), and so much more!

Is Airbnb Profitable in California? 

Short-term rentals in California can definitely be a source of passive income because of the many tourists visiting annually. For example,​​ a typical 1 BD apartment has a steady 50% occupancy rate and can generate $30,500 annually! 

To cut the story short, Airbnb is definitely profitable in California! For instance, based on an Airbnb income calculator, you can earn a whopping $6,612 monthly in San Diego alone! This area is attracting millions of visitors from around the globe for attractions such as The San Diego Zoo, San Diego Zoo Safari Park, SeaWorld San Diego, and LEGOLAND California.

Not yet convinced? Feel free to listen to one of our interviewees from Into The Airbnb Podcast – an Airbnb host consultant & property manager from California:

Rental Arbitrage in California

If you want to start an Airbnb investment in California but are financially limited to purchasing your own property, don’t worry. You can still earn a passive income in two words: Rental Arbitrage! This refers to the practice of renting out properties for the sole purpose of sub-letting them on platforms such as Airbnb or HomeAway.

However, if you only want to do Airbnb during your free time and are worried about not having to manage your listings properly, then it’s best to take a look at the best property management companies in California to lessen the burden!

It may be a challenge to find landlords for Airbnb rental arbitrage since there are certain restrictions in other areas and other landlords simply do not allow it due to insurance policies. In addition to this, you also have to consider major factors in starting a rental arbitrage business in your preferred city. This includes rules & regulations, where to find the most profitable area, & how to find rental arbitrage properties.

Rental Arbitrage in San Diego is certainly legal and there are ways to predict your listing’s profitability. For instance, a short-term rental analytics tool can assure your nightly revenue of $276 for a 1-bedroom apartment in San Diego with a steady occupancy rate of 72%. These Airbnb key metrics should be strictly monitored as your business’ profitability depends on them!  

best areas for airbnb in california

Given the fact that California is a practical investment destination for property investors, you can always have the option to do Rental Arbitrage in California and earn money while you’re saving up to own a property.

Top 10 Most Profitable Cities & Neighborhoods for Airbnb in California

California offers excellent investment opportunities for property investors, so we went ahead and did the heavy work for you! Oftentimes, the struggle is targeting an entire city but missing out on a particular neighborhood that has an even greater chance of profitability!

best areas for airbnb in california

Using Airbtics’ market analysis, we were able to accurately get a grasp of Airbnb demand in California and filtered the top 10 most profitable cities:

1. Santa Barbara
Santa Barbara data
  • Annual Revenue: $58,334
  • Occupancy Rate: 56%
  • Average Daily Rate: $312

Based on Airbtics’ analytics tool, the best neighborhood in this area is Santa Barbara Downtown. It has an average occupancy rate of 53%. The average daily rate in this neighborhood is $281.

2. Yosemite
Yosemite data
  • Annual Revenue: $100,984
  • Occupancy Rate: 52%
  • Average Daily Rate: $424

Based on Airbtics’ analytics tool, the best neighborhood in this area is Yosemite West. It has an average occupancy rate of 65%. The average daily rate in this neighborhood is $323.

3. San Francisco
San francisco data
  • Annual Revenue: $32,607
  • Occupancy Rate: 56%
  • Average Daily Rate: $152

Based on Airbtics’ analytics tool, the best neighborhood in this area is North Beach. It has an average occupancy rate of 30%. The average daily rate in this neighborhood is $136.

4. San Diego
best areas for airbnb in california
  • Annual Revenue: $36,739
  • Occupancy Rate: 49%
  • Average Daily Rate: $199

Based on Airbtics’ analytics tool, the best neighborhood in this area is North Park. It has an average occupancy rate of 50%. The average daily rate in this neighborhood is $178.

5. Los Angeles
best areas for airbnb in california
  • Annual Revenue: $30,868
  • Occupancy Rate: 56%
  • Average Daily Rate: $155

Based on Airbtics’ analytics tool, the best neighborhood in this area is Malibu. It has an average occupancy rate of 35%. The average daily rate in this neighborhood is $1,106.

6. Joshua Tree
best areas for airbnb in california
  • Annual Revenue: $36,684
  • Occupancy Rate: 44%
  • Average Daily Rate: $200

Based on Airbtics’ analytics tool, the best neighborhood in this area is Yucca Valley. It has an average occupancy rate of 37%. The average daily rate in this neighborhood is $239.

7. Riverside
best areas for airbnb in california
  • Annual Revenue: $12,372
  • Occupancy Rate: 29%
  • Average Daily Rate: $93

Based on Airbtics’ analytics tool, the best neighborhood in this area is Mission Inn Downtown. It has an average occupancy rate of 35%. The average daily rate in this neighborhood is $125.

8. Palm Springs
best areas for airbnb in california
  • Annual Revenue: $41,612
  • Occupancy Rate: 40%
  • Average Daily Rate: $306

Based on Airbtics’ analytics tool, the best neighborhood in this area is Coachella Valley. It has an average occupancy rate of 36%. The average daily rate in this neighborhood is $449.

9. Lake Tahoe
best areas for airbnb in california
  • Annual Revenue: $61,838
  • Occupancy Rate: 50%
  • Average Daily Rate: $312

Based on Airbtics’ analytics tool, the best neighborhood in this area is Incline Village. It has an average occupancy rate of 43%. The average daily rate in this neighborhood is $314.

10. San Bernardino
best areas for airbnb in california
  • Annual Revenue: $31,628
  • Occupancy Rate: 36%
  • Average Daily Rate: $221

Based on Airbtics’ analytics tool, the best neighborhood in this area is Crestline. It has an average occupancy rate of 42%. The average daily rate in this neighborhood is $199.

General Overview 

Now that you have a deeper understanding of the best short-term rental markets in California, , don’t just stop here and miss out on greater opportunities. 

Since Airbnb is rapidly increasing and constantly changing for each city in the world, it is crucial not to make decisions based on wild guesses. The data points mentioned in this article such as Airbnb occupancy rates per city, annual revenue, and average daily rates should be your basis for investing in properties in California – or other cities with high occupancy rates.

Hence, an accurate data analytics tool can help your business stand out among your surrounding competitors and benchmark your property by tracking the occupancy rates of competing listings in your preferred city. With the help of our all-in-one analytics service, you can vastly enhance your monthly revenue, create a comparison for each neighborhood, add the appropriate amenities and so many more exciting features. Try Airbtics today and think of long-term profitability!

Explore The Most Profitable Airbnb Locations in California

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