Airbnb rental arbitrage isn’t over, but the easy days are. Find out where it still works in 2025, what to avoid, and how to make it worth your time.

Airbnb Rental Arbitrage: A Complete Guide for 2025

Airbnb Rental Arbitrage in 2020: Where to Make Money Without Buying Property

You need a big gap between rent and revenue for rental arbitrage to make sense, and those margins are harder to find in 2025.

Rental arbitrage is a great way to break into the short-term rental space without buying property, but it’s risky to scale a portfolio on leases.

Use tools like AirDNA to compare revenue to rent, check for local saturation, and find properties that actually have a shot at being profitable.

You don’t need to own real estate to earn on Airbnb, but don’t mistake that for easy money.

Rental arbitrage—leasing a property long-term and listing it for short-term stays—has helped plenty of hosts break into the short-term rental world (STR) without buying a home. It’s still a viable entry point, but the rules have changed in 2025.

Margins are tighter. Risks are higher. Arbitrage isn’t off the table, but it isn’t plug and play anymore. 

In this guide, we’ll break down what Airbnb rental arbitrage really looks like in 2025, highlight the best (and worst) markets, and tell you what it takes to pull it off.

Understand the investment potential of any address in the world.

Airbnb rental arbitrage—sometimes called “Airbnb rent to rent”—is the practice of leasing a property long-term and re-listing it as a short-term rental on sites like Airbnb or Vrbo.

It’s a way to earn short-term rental income without owning the property. You lease the unit, furnish it, list it, and—if the numbers work—bring in more each month than you pay in rent. You’re a middleman (or middlewoman) in the real estate game.

This unique strategy has gained popularity in recent years, fueled by the rise of the sharing economy and the allure of passive income. It’s one of the easiest ways to get started in the short-term rental space because there’s no mortgage and no down payment. Airbnb rental arbitrage is a lower-cost path into a business with real earning potential.

That being said, it’s not a guaranteed shortcut. You’ll need a solid plan, a strong market, and a close eye on the numbers. We’ll get into all of that later on.

Let’s say you sign a long-term lease on a house for $2,500 a month. You list that same property as a short-term rental for $200 a night. With steady bookings, you could cover your rent in under two weeks—and everything after that is profit (minus your expenses).

That’s the basic play: rent low, earn high. The bigger the gap between what you pay and what you earn, the more upside you’ve got. Arbitrage lives in that margin—and knowing how to find it is what makes this model work.

Yes, Airbnb rental arbitrage is legal. That doesn’t mean it’s allowed everywhere, though.

Whether or not you can run an arbitrage business depends on local short-term rental regulations, the terms of your lease, and whether the property owner gives you the green light. Some cities require specific permits. Some buildings have restrictions. And some landlords just don’t allow subletting, period.

That’s why it’s essential to get written permission and a clear agreement in place before listing any property. A rental arbitrage contract should spell out what’s allowed and protect both sides if something goes wrong. It’s also smart to look into insurance options designed for this setup.

Why landlords say yes to Airbnb rental arbitrage

At first glance, Airbnb rental arbitrage might sound like a one-sided win for the tenant. However, when structured well, rental arbitrage brings a host of benefits to property owners, often without any of the operational headaches of managing short-term guests themselves.

Reliable rent: Arbitrage renters usually sign long-term leases. This gives landlords consistent income, even during off-seasons.

Better property care: These renters treat the property like a business asset. That means professional cleaning, regular maintenance, and fewer long-term tenant issues.

Lower wear and tear: Guests usually stay a few nights, spend much of their time outside the property, and don’t accumulate personal belongings. Frequent cleaning and inspections also mean issues are caught early.

More control, less risk: With a solid agreement, landlords can set boundaries, require insurance, and stay in the loop without doing the bulk of the work.

Is Airbnb Rental Arbitrage Profitable in 2025? 

Airbnb rental arbitrage remains a viable strategy in 2025, but it’s not the growth hack it used to be.

For short-term rentals, 2024 brought revenue stability. Listings in apartment buildings saw occupancy levels increase slightly to 56.8%, up from 56.1% in 2023. Average daily rates (ADRs) also saw a modest 1.3% increase, leading to a 2.6% rise in revenue per available rental (RevPAR).

On the flip side, the long-term rental market is facing challenges. As of Q1 2025, the U.S. apartment vacancy rate reached 6.9%, the highest since 2017. This has exerted downward pressure on long-term rents. Apartment List reported a 0.4% year-over-year decline in rents nationally, while Zillow noted a 2.8% increase for multifamily units.

At AirDNA, we assess rental arbitrage viability using the short-term rental (STR) premium, which is the difference between what a rental earns on Airbnb vs. what it costs to lease. Despite solid STR performance and declining long-term rental rates, STR premiums over recent years show a downward trend. 

This plateau suggests that while opportunities still exist, the explosive growth phase of rental arbitrage is over. 

Multifamily buildings like apartments used to be the go-to for arbitrage—multiple similar units, repeatable leases, and easier logistics. STR revenue in apartment units rose 5.8% to $3,539 in 2024—roughly double the average long-term rent in those same markets. However, Airbnb listings in mult-family buildings are dropping off. Supply just isn’t keeping up, despite the solid earning potential.

Airbnb rental arbitrage is a decent way to get your foot in the door, but building a business on leased properties is a risky move. Variable rents, thinner margins, and shifting regulations have made Airbnb rental arbitrage harder to scale and easier to get burned. Interested investors need to approach it with tempered expectations and thorough market research.

Arbitrage can still work, but only in the right market, with the right numbers, and a clear plan to evolve. It’s a way to get in—not a way to grow.  

How to Spot a Good Market for Airbnb Arbitrage

Not all properties are equally compelling candidates for rental arbitrage, and the right property to lease and re-rent can change by the year.

For multi-family homes, 2024 premiums for rental arbitrage potential rose to 101% from 95% in 2023, while premiums for Airbnb arbitrage in single-family homes increased slightly to 125% from 124% in 2023.

The differing premiums between single- and multi-family homes are a national trend, but profitability really depends on the individual market. 

Here’s what to look for if you want the long-term lease costs and short-term rental revenue to stack up in your favor.

The STR premium shows how much more a short-term rental earns compared to long-term rent. A premium of 100% or higher means STR income is at least double the rent—creating a potential cushion for expenses and profit. Anything below that? You’re likely cutting it too close.

It’s not just about what you earn today—it’s about what happens over time. Ideally, STR revenue is rising faster than rent. In 2024, STR revenue in multifamily units grew 5.8%, while rent growth was mixed: down 0.4% nationally according to Apartment List, or up 2.8% per Zillow. Markets where rental income is catching up—or even outpacing STR revenue—are riskier bets.

Vacancy matters. A high vacancy rate can give you leverage with landlords, whether it’s negotiating lower rent, securing a more flexible lease, or getting permission to operate short-term. As of Q1 2025, the national apartment vacancy rate hit 6.9%—the highest in years. That opens a door for smart, data-backed deals, if you know where to look.

We’ve put together a list of the 63 largest U.S. markets and submarkets with all of the information that you need to assess their viability as Airbnb rental arbitrage hubs. Filter STR performance information and Airbnb arbitrage indicators by location or real estate type in the full dashboard. 

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The Best Cities for Airbnb Arbitrage in 2025

The table below shows the top 10 U.S. markets for arbitrage based on their STR premium—the percentage difference between monthly short-term rental revenue and long-term rent. In simple terms: it’s the gap where profits live. The bigger the number, the more upside potential you have (assuming you’re managing host costs and occupancy).

These markets combine strong STR earnings with relatively low rent, creating the kind of margin that can still make arbitrage worth the effort in today’s market.

Curious about a market you’re eyeing or want to dig into where arbitrage might still work? Use the full dashboard to compare STR premiums, view emerging markets, and see how many listings are already active—so you can find the best fit for your next arbitrage deal. 

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On the flip side, plenty of markets have slipped into low-margin territory, with STR premiums so tight that monthly short-term rental income barely beats the cost of rent—if it does at all.

When that margin shrinks, arbitrage gets risky. Once you factor in startup costs, turnover, management, and platform fees, there’s little to no profit left on the table. These are tough places to make arbitrage work, especially for newer operators.

Bottom line: if you’re considering an Airbnb arbitrage strategy in these markets, tread carefully. The numbers don’t offer much cushion and even small shifts in revenue or regulation could put you in the red.

AirDNA’s powerful yet easy-to-use tools make hosting and investing a breeze. This means having every insight you need, all in one place, always up-to-date.

In 2025, Airbnb rental arbitrage is a launch strategy. Like any smart launch, it only works if you go in with a plan. Here’s how to do it right from the beginning.

Look for areas with strong demand, solid nightly rates, and a healthy gap between rent and revenue. Not every neighborhood is built for short-term success, so focus on submarkets where the numbers make sense and local rules allow STRs. The goal is to find a property that’s in a desirable area for travelers, easy to manage, and has the potential to perform.

Once you’ve found a promising property, take a hard look at the financials. You'll need more than just the first and last month’s rent—furnishings, kitchen basics, Wi-Fi, utilities, maybe even a fresh coat of paint. Getting a place STR-ready takes real investment. Map out your startup costs and ongoing expenses so you know what it’ll take to break even and what kind of margin you’re really working with. Arbitrage only works when the numbers hold up from day one.

Before you list anything, make sure you’re allowed. Have an honest conversation with the landlord, explain your plans, and get their full permission to operate as a short-term rental. Put it all in writing because vague nods won’t protect you later. Don’t forget to check local short-term rental rules because every city’s different, and ignoring regulations can shut you down fast. Better to know the limits up front than deal with surprises down the line. 

You don’t necessarily need fancy furniture or designer decor. You just need a space that’s clean, comfortable, and can hold up to frequent guests. Think durable beds, blackout curtains, fast Wi-Fi, and the basics people expect. The goal is to make your space Airbnb-ready—practical and appealing in photos, with strong attention to detail.

Your listing does the heavy lifting online. Take the time to showcase yourself in the host description. Use clear, high-quality photos and a catchy title that highlights what makes your space appealing, whether that’s location, layout, or amenities. Clearly state your minimum stays and house rules in the listing, so there are no surprises for either party.  

Managing a short-term rental requires more than handing over the keys. You’ll need a system for cleanings, guest communication, maintenance, and reviews. Whether you handle it yourself or use a property management software like Uplisting, consistency is key.

Set the right rates and protect your margins

You don’t need to set nightly rates in the dark. Use recommended rates and local market data to set a nightly price that’s competitive with similar listings in your area. Revisit your pricing regularly, especially around peak seasons or local events. The right rate can make or break your margins.

To succeed with Airbnb rental arbitrage in 2025, you need to think like an investor but operate like a tenant. The right lease can unlock consistent cash flow. The wrong one can drain your budget fast.

Start by making sure short-term rentals are allowed in the area. Then take a look around: 

Are there other vacation rentals nearby? 

AirDNA’s market research tool allows you to quickly assess the viability of an area for short-term rentals by assigning a unique Market Score and showcasing how the performance metrics that matter (ADR, RevPAR, and occupancy rates) have changed over time.

Use custom filters to see how the Market Score and performance changes by real estate type, number of bedrooms, and price tier, among other factors. This combination of data will allow you to pinpoint profitable areas as well as the most profitable property type.

Year-over-year RevPAR growth and a strong Market Score is a good sign that the market can support another listing. However, demand alone isn’t enough. You’re not buying the property, so you need a place that works both as a short-term rental and for a landlord open to the model.

Start with platforms like Airbnb-friendly apartments, which list multifamily buildings where property managers explicitly allow short-term sublets. It’s a shortcut to skipping awkward conversations and finding units where rental arbitrage is baked into the lease.

Individually owned units (small landlords may be more flexible)

Vacancies in high-supply areas, where landlords may be more open to creative lease terms.

Mid-term rental buildings, which are already STR-adjacent

Be upfront in your pitch. Position yourself as a professional operator who will maintain the unit better than the average tenant and provide stable, on-time payments. Mention routine cleanings, guest screening, and potential for longer lease terms.

Not every listing that performs well as an STR makes sense for short-term rental arbitrage. You need units that are:

Located in safe, walkable areas with parking

Remember that rental arbitrage isn’t passive income. Even if you’re not buying, upfront costs like furnishings, smart locks, cleaning teams, and STR insurance can add up. Be honest about what you can manage and automate.

Once you’ve identified a viable Airbnb arbitrage opportunity where the landlord is on board, plug the address, bedroom, and bathroom count into Rentalizer. AirDNA’s Airbnb revenue calculator offers realistic short-term rental revenue projections for individual properties based on how similar vacation rentals in the area are performing. This estimate of earning potential is invaluable information to inform your budget and your business plan.

The key is to lead with the data, not the vibe. When you find a property where the rent, revenue, and regulations line up? That’s when arbitrage has a shot at working.

Understand the Airbnb arbitrage potential of any address in the world.

Our Airbnb rental arbitrage opportunity analysis includes data on 63 of the largest U.S. markets and their submarkets. Long-term rental data was obtained from Zillow research, while short-term rental performance data came from AirDNA. Market data for both datasets was collected by Metropolitan Statistical Area (MSA) as defined by the U.S. Office of Management and Budget (OMB). Data is as of March 2025.

To be included in the analysis, a market needed to have more than 50 total active STR listings in the last year, and submarkets had to have at least 20 active STR listings. Short-term rental revenue numbers are the sum of the nightly rate and the cleaning fee. They exclude service fees and taxes, with the assumption that any additional costs would be added to the rental rate to cover those expenses. 

It's important to note that if you’re interested in STR arbitrage, you must account for start-up costs (appliances, furniture, decor, and licensing and legal fees) and ongoing costs like utilities, maintenance, toiletries, and insurance. Given the variable nature of these expenses, they were not included in our analysis. 

Yes, rental arbitrage can be worth it if the numbers work. It’s most effective in markets where short-term rental (STR) income clearly exceeds monthly rent, the value difference we refer to as the STR premium. That said, Airbnb arbitrage is best used as a way to get started with short-term rental hosting, not as a model to scale long-term.

No, rental arbitrage is not passive income. While some operations can be automated, most hosts need to manage cleanings, guest communication, and property upkeep. It gets easier as you streamline processes and gain experience, but it’s rarely hands-off. 

How do I convince my landlord to arbitrage Airbnb? 

Start by explaining to your landlord how short-term rental arbitrage works and highlight the benefits: consistent rent, a well-maintained property, and less wear and tear. Offer a formal agreement and insurance coverage to make it feel like a professional setup—not a risk. You can go as far as to offer a share in the profits or references from other landlords who have benefitted from similar arrangements. 

How much does it cost to start a rental arbitrage? 

Starting Airbnb rental arbitrage typically costs between $3,000 and $10,000, depending on the market and property. You'll typically need to cover a security deposit, first month’s rent, and upfront costs to furnish and set up the unit as a short-term rental—think beds, kitchen essentials, Wi-Fi, and cleaning supplies. The more guest-ready the space, the faster you can start booking and earning. 

Can you make a living off of arbitrage? 

You can make money with rental arbitrage, but making a full-time living is tough to sustain. Building a portfolio of leased units comes with risks—especially when rent is high or rules change. Arbitrage works best as a stepping stone toward more stable strategies where more control is in your hands. 

How do I find rental arbitrage properties?

Find rental arbitrage properties by identifying legal short-term rental markets with high profit margins. Use platforms like AirDNA to analyze rental demand, compare projected income to local rent, and evaluate each property’s earning potential. We recommend starting with the Airbnb-friendly apartments database to find a landlord that’s willing to work with you.

Get granular insights into which neighborhoods are hottest for vacation rentals.

Discover hidden gems for your next investment

Airbnb rental arbitrage still works, but only in the right markets. Learn what’s changed, where profits are possible, and how to avoid costly mistakes.

Airbnb Rental Arbitrage: A Complete Guide for 2024

What if you didn’t have to buy a property to snag a piece of the Airbnb profit pie? That’s the promise of Airbnb arbitrage, a practice that involves leasing properties for the sole purpose of relisting them as short-term rentals (STR) on platforms like Airbnb. 

While the Airbnb rental arbitrage route can be a fast track, there are also a number of potholes. Whether you’re a seasoned real estate investor or a hosting hopeful, this guide will delve into data behind arbitrage—and how you can use it to earn more in 2024. 

What is Airbnb Rental Arbitrage? 

Airbnb rental arbitrage is the act of renting a property long-term and then re-renting it short-term on vacation rental sites like Airbnb or Vrbo. 

Essentially, it's the art of becoming a middleman (or middlewoman) in the real estate game, leveraging the demand for short-term accommodations to generate income without actually having to own a property. It's a bit like flipping houses, but instead of selling, you're renting them out for a tidy profit.

This unique strategy has gained popularity in recent years, fueled by the rise of the sharing economy and the allure of passive income. With the right approach, savvy hosts can turn underutilized properties into lucrative revenue sources while providing travelers with unique and memorable lodging experiences.

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Airbnb Rental Arbitrage Example

Let’s say you rent a house on a long-term lease for $2,500 per month. Subletting the same house as an STR at a rate of $200 per night could earn you more than you pay in rent—in less than two weeks. Any further STR income within the month would be profit for you, minus expenses. STR arbitrage opportunities depend on the difference between what you are paying for the lease and what you’re earning on Airbnb. 

Is Airbnb Arbitrage Legal? 

Airbnb rental arbitrage is legal. It’s also been widely adopted, with benefits for STR operators and long-term rental (LTR) property owners alike.

Many LTR property owners understand that a resident’s rental arbitrage business brings increased occupancy, meaning more income for both the long-term renter and, in turn, themselves. Rental arbitrage allows property owners to share in profits from these opportunities and enables them to diversify their rental income. 

Despite its legality, each party should sign a rental arbitrage contract before listing the unit on Airbnb or another platform. It’s also a wise investment to look into ​​rental arbitrage insurance.

Find the best market for arbitrage

Is Airbnb Rental Arbitrage Profitable in 2024? 

Whether Airbnb rental arbitrage is profitable boils down to two main factors: STR revenue and effective LTR rent. The greater the difference between the revenue an STR operator pulls in and the rent they pay, the greater the profit they’re likely to earn. 

Here at AirDNA, we express that ratio as an STR premium, which is the percent difference between STR revenue and LTR rent for any given month.

Airbnb Rental Arbitrage Profits

In 2021, escalating demand for STR stays coupled with slow supply growth sent occupancy rates, average daily rates (ADR), and revenues soaring. Monthly STR revenues for single and multifamily homes reached $4,425, marking a 21% year-over-year (YOY) jump.

Home prices also surged that year, triggering an increase in LTR rents, albeit at a slower rate of 8% YOY. STR revenue was growing significantly faster than that 8%, which is why many markets across the U.S. were ripe with opportunities for profitable Airbnb rental arbitrage. In 2021, STR premiums averaged 170%. 

However, monthly STR revenues slowed in the second half of 2021 as more listings entered the market. Rents also grew, causing STR premiums to decline to 156% in 2022. Arbitrage premiums continued their decline through 2023 on the heels of high supply growth, declining STR revenues, and steep LTR rent. 

Currently, STR premiums for single and multifamily homes across the U.S. average just 124%. Still, that means hosts who engage in arbitrage are earning 124% more in STR revenue than what they pay in rent. That’s a respectable profit, even if it is down from the highs of 2021.  

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Top Property Types for Rental Arbitrage in 2024

Not all properties are equally compelling candidates for rental arbitrage, and the right property to lease and re-rent can change by the year. So far, 2024 seems to be the year of the multifamily home. Here’s why: 

During the pandemic, there were arbitrage opportunities aplenty for single-family homes. Fear of crowded cities and shared spaces drove travelers to STR stays in suburban and rural destinations outside major metropolitan areas. In the last two years, though, demand for cities is back in force, turning the tide for STR revenues and arbitrage opportunities toward multifamily homes. STR premiums for multifamily homes averaged 142% as of February 2024, compared to just 104% for single-family properties. 

Multifamily homes have also remained attractive for Airbnb rental arbitrage because LTR rents have grown more slowly. Rent for single-family homes has increased 14% in the last two years, while rents for multifamily homes have only increased 9%. This is due, in part, to the flurry of construction of multifamily units, which has triggered an uptick in vacancy rates and a resulting slowdown in rent growth. 

As of Q4 of 2023, the vacancy rate for U.S. apartments was 6.5%, up 16.6% YOY, according to Apartment List research. Meanwhile, effective rents for new apartment leases were down 1% YOY. As more new construction crops up, greater apartment vacancies and slow rent growth may continue to create opportunities for Airbnb arbitrage. 

Arbitrage Variations by Market

While arbitrage opportunities are promising for multifamily homes across the U.S., how profitable they may be depends on the market. 

For example, STR premiums for single-family homes in Detroit are 65% higher than STR premiums for multi-family homes in the city. Meanwhile, in Pensacola, FL, and Tampa, FL, where condos are king, STR premiums for multifamily homes far exceed those of single-family homes. 

In short, to find the most lucrative arbitrage opportunity, you have to understand your market. 

How to Start Airbnb Rental Arbitrage

Starting an Airbnb rental arbitrage business requires a blend of market data & analysis, negotiation skills, and a dash of entrepreneurship. Here's a step-by-step guide to help you kickstart your arbitrage venture:

Market Research and Property Identification: Begin by researching your local real estate market to identify areas with a high demand for short-term rentals. Look for properties with potential, considering factors like location, amenities, and rental rates. Remember, the goal is to secure a property that can be transformed into a desirable Airbnb listing.
Financial Analysis and Budgeting: Once you've identified a potential property, conduct a thorough financial analysis. Estimate all costs involved, including monthly rent, utilities, furnishings, and any potential renovation expenses. Develop a budget that outlines your initial investment and ongoing operational costs.
Lease Negotiation and Legalities: Negotiate favorable lease terms with the property owner, keeping in mind the potential short-term rental use. Ensure you have their full permission to re-let the property and document the terms in writing. Research and develop a clear understanding of local regulations regarding short-term rentals to avoid legal complications.
Property Transformation and Furnishing: Transform the property into an inviting and functional space for short-term guests. Furnish it with comfortable and stylish items, paying attention to details that enhance the guest experience.
Airbnb Listing Creation: Craft an enticing Airbnb listing that highlights the unique features of your property. Utilize high-quality photos, write compelling descriptions, set strategic minimum stay policies, and pick your pricing based on market research.
Operational Management: Once your property is listed, be prepared for guest inquiries, bookings, and property maintenance. Implement efficient operational management, including responsive communication, regular cleaning with reasonable cleaning fees, and addressing guest needs promptly.
Dynamic Pricing Strategies: Explore dynamic pricing tools to maximize your rental income. By adjusting your pricing based on demand, local events, and other factors, you can optimize your revenue and stay competitive in the market.

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What is the Formula for Successful Airbnb Arbitrage? 

Engaging in successful Airbnb arbitrage involves following a well-defined formula that combines strategic planning, financial savvy, and a data point (or two or three…) Here's a breakdown of the essential elements in a winning arbitrage formula: 

1. Get Good at Spotting Trends

Begin by conducting a thorough market analysis to identify trends and demands in your chosen location. Stay informed about local events, peak seasons, and factors influencing short-term rental demand. This knowledge will serve as the foundation for your strategic decisions.

2. Do Your Homework for Each Property

Every deal is different, and, while the data in this guide may be helpful, it only speaks to the average performance of properties in a given market or submarket. There are pockets of potential opportunity in all markets. On average, a market might appear unappealing for Airbnb rental arbitrage, but all markets have combinations of submarkets and property types that could succeed. 

A single property’s performance may not match the submarket or market average, and you should analyze each property separately before signing on the dotted line. Try more detailed tools like: 

AirDNA App: By analyzing the booking activity of over 10 million vacation rentals on Airbnb and Vrbo, Rentalizer can predict what any home around the world would earn as a vacation rental.
AirDNA Vacation Rental Data: Gain valuable insights into the performance of over 10 million vacation rentals across 120K global markets worldwide. Study the critical trends in your market to understand exactly how the STR industry is evolving.
3. Prepare for Risk

With any sort of real estate arbitrage, there are inherent risks and a long list of cautionary tales. It is essential to understand the data and how and why the arbitrage opportunity might be temporary. Economic theory suggests that arbitrage should only be temporary and that the market will adjust to supply/demand pressures. 

As discussed earlier, single-family homes have seen a large influx in supply in the last few years, thus reducing the profit opportunity. As more homes are added to an area, that can increase competition for guests, which can lead to discounting and a reduction in the overall revenue potential for an STR. 

Other risks can come from new city or state regulations and even changing policies from the building owner. For example, in recent years, new STR regulations have come into play in Seattle, Los Angeles, Boston, and most recently, New York City. These short-term regulations limit the ability for STRs to operate, and individuals looking to arbitrage in these markets need to be informed. 

4. Make Data-Driven Decisions

Rental arbitrage isn’t a silver bullet, and you shouldn’t enter a lease on a hunch or a while. Instead, integrate data-driven decision-making into your approach. 

Leverage analytics tools and performance metrics to assess the effectiveness of your strategies. Use data to refine your operations, identify growth opportunities, and stay ahead of market trends.


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The Best Cities for Airbnb Rental Arbitrage in 2024

The best cities for Airbnb rental arbitrage are those where monthly STR revenue far exceeds LTR rates. Topping the lists in 2024 were markets that have consistently seen high arbitrage premiums over the last few years: 

Charleston, South Carolina
Providence, Rhode Island
Jacksonville, Florida
Nashville, Tennessee 

The table below also offers a city-by-city view of STR premiums. Find your ideal arbitrage market by sorting according to LTR rates, monthly STR revenue, or YOY growth in STR premiums. To find rental arbitrage properties, use the table to identify markets that have seen the most arbitrage opportunity growth in the last year. 

You can also use the real estate and location filters to view data by single-family or multifamily homes or by location type. 

Best Submarkets for Rental Arbitrage

To help you better understand how Airbnb rental arbitrage may pencil out at a more granular level, we’ve created a tool that allows you to look at LTR effective rents and STR performance across submarkets, meaning neighborhoods, towns, and suburbs within a larger market. 

Earn More Through Arbitrage With Strategic Pricing

Strategic pricing is the game-changer that can elevate your Airbnb arbitrage venture from profitable to highly lucrative. By implementing dynamic pricing, you can maximize your revenue potential and adapt swiftly to changing market conditions, ensuring optimal returns in response to local events, seasonal demand shifts, or sudden surges in travelers. 

Try Our Vacation Rental Pricing Tool

Use Smart Rates™ to optimize your pricing strategy.

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Learn More About AirDNA’s Methodology

Our Airbnb rental arbitrage opportunity analysis includes data on 39 of the largest U.S. markets and their submarkets. LTR rent data was obtained from Zillow research, while short-term rental performance data came from AirDNA. Market data for both datasets was collected by Metropolitan Statistical Area (MSA) as defined by the US Office of Management and Budget (OMB). 

To be included in the analysis, a market needed to have more than 50 total active STR listings in the last year, and submarkets had to have at least 20 active STR listings. We analyzed the revenues excluding cleaning fees, taxes, and other fees, with the assumption that those additional costs would be added to the rental rate to cover those expenses. 

It's important to note that those interested in STR arbitrage should account for the additional expenses of successfully managing an STR property, such as start-up costs (appliances, furniture, decor, and licensing and legal fees) and ongoing costs like utilities, maintenance, toiletries, and insurance. Given the variable nature of these expenses, they were not included in our analysis.

FAQs

Is rental arbitrage worth it? 

Rental arbitrage can be worth it if you approach it with careful planning. The potential for significant profits exists, especially in cities with high demand for short-term rentals. However, success depends on many factors, including location, market conditions, and your ability to manage properties efficiently.

Is rental arbitrage passive income? 

While rental arbitrage has the potential for passive income, it typically involves active management, especially in the initial stages. You'll need to handle guest inquiries, coordinate cleanings, and manage bookings. Over time, as you streamline processes and gain experience, the level of activity required may decrease, making it a more passive income source.

How do I convince my landlord to arbitrage Airbnb? 

Convincing your landlord to arbitrage starts with transparent communication. Highlight the benefits, such as stable rental income, reliable tenants, and potential property improvements. Offer to share additional profits, ensure insurance coverage, and provide references from other landlords who have benefited from similar arrangements.

How much does it cost to start a rental arbitrage? 

The initial costs vary but typically involve the security deposit, first and last month’s rent, furnishing and decorating the property, setting up utilities, and initial marketing. Some costs may be negotiable with your landlord, while others are essential for creating a comfortable and attractive space for guests.

Can you make a living off of arbitrage? 

Yes, it's possible to make a living off of rental arbitrage, especially if you scale your operations. Success often depends on your ability to manage multiple properties efficiently, adapt to market changes, and provide excellent guest experiences. Like any business venture, careful planning and dedication significantly contribute to long-term success.

Discover the ins and outs of rental arbitrage, its legal status, and how you can leverage it to get your  irbnb business started today.

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