Because the Airbnb business continues to grow and offers more opportunities to landlords and those searching for a rental property, people are constantly looking for new and better ways to work around this platform and make money.
And the truth is, there’s a lot of ways to earn some extra cash and ramp up your finances.
One of them happens to be Airbnb rental arbitrage Florida.
If this is the first time you’re hearing about this, think of it as double renting.
In Florida, where the prices of Airbnb rental properties are always going up, this could be extremely useful.
Mind you, this was just scraping the surface regarding Airbnb investment property. There’s a lot more you MUST know if you’re considering this business option.
So, if you’re interested, we’ve got all the crucial points covered in this 2022 complete guide. Read on!
Rental Arbitrage: Explained
In the simplest of terms, rental arbitrage Florida can be described as one word – sub-renting.
In real estate, this is the practice in which you find a property that you rent out, convince your landlord, and then sub-rent it to a third party. Now, the process isn’t as simple as ABC – and you need to know your tactics, finances, and opportunities.
Most often, people decide to go with this short-term rental arbitrage after they’ve taken out a loan, and they’re looking for simple and easy ways to repay it.
You could say it’s kind of like house hacking.
We get it, though. The prices of owning property haven’t come down for over a decade – and this presents a somewhat “safe cash inflow.”
Is Airbnb Legal In Florida?
When we talk about this kind of sub-renting, we can’t bypass the legal side of the story. To some, renting out a property you’ve already rented seems a bit shady.
Luckily, Airbnb laws in Florida allow this. Even more so, enforcing any other regulations regarding Airbnb monthly rentals Florida is not permitted.
It’s simple; if we look at the bigger picture, the US has many destinations that are considered top locations for a short-term vacation rental. Florida seems to be the perfect destination for such an endeavor with its long and heavenly-looking beaches.
Furthermore, Florida remains one of the few markets in the US that’s still desirable for both owner-occupied and non-owner-occupied properties, a.k.a. arbitrage rental properties.
There’s one thing, though:
Florida’s local governments regulate Airbnb rentals.
Let’s be clear about one thing before moving on with rental arbitrage Florida:
It’s legal as long as you abide by the law and let your owner know what you’re up to in terms of the rental property. But if you fail to fulfill the points of the contract or break the agreement with your landlord, you may find yourself in a very nasty legal situation.
Also, you ought to be careful when it comes to who you’re leasing the property; the tenants’ negligence can leave you in debt, which is definitely not what you want.
How To Set Up Rental Arbitrage In Florida: The Key Steps
Since Airbnb demand is especially prominent in rental arbitrage Florida, it’s about time we’ve discussed the steps you need to take.
First, Talk To Your Landlord
The basis of everything is to talk to your landlord about your intentions before doing anything else. You can’t go subletting tenants on a property that’s not even yours in the first place.
Going against the rules could create a massive conflict that can result in losing the business – and the property you rented out, as well.
Along the way of rental arbitrage Florida, you will come across two types of landlords – those that are completely fine with it and those that’ll have a lot of doubts about it.
If you come across the second group, here’s a heads up:
The issues that will most commonly bother them include local laws, negligent guests, and insurance.
We’ve already discussed local laws – and there’s not much trouble when it comes to Florida. However, negligent guests could cause quite the issue. It’s a matter of manners, but you can put a limit and allow renting to a specific category – for example, tenants without pets or kids.
An issue closely related to this is insurance, and it’s a crucial one. If your guests damage the property, chances are you will be responsible for the costs.
Conduct Airbnb Market Analysis
If you can reach common ground with your landlord and agree on terms regarding the rental arbitrage Florida, now’s the time to put your research skills into action.
Tenants are certainly not going to come to you just because it’s Florida; you need to conduct thorough research on the area and evaluate the Airbnb demand there.
The three factors that serve as guidelines here are:
First and foremost, you should look for properties that can bring you high income and enable profit. If you’re at zero, you will not be able to do anything – let alone repay the loan.
The Florida market should have a high demand for short- and long-term rentals.
As for the regulations, you’ll probably need to go over the city laws and regulations in effect at the time so that something doesn’t jeopardize your business and steal your profits.
Last – but certainly not least – seasonality is everything. With Florida, it’s clear as day that the best profitability for rental arbitrage is during the summer.
What we’re saying is that you should use your acquired Airbnb market data to good use and ensure a good return!
Need some help pinning down the most profitable location for a short-term rental arbitrage?
You should turn your attention to our Airbnb calculator:
Our Mashvisor Airbnb Profitability Calculator is your go-to place if you want to succeed in finding the locations that’ll bring you the most profit. By using our tool, you can evaluate and compare Airbnb income and occupancy in the desired area in a matter of minutes.
Discuss Start-up Costs
Although the question of “how to find rental arbitrage properties” might take up most of your time, you shouldn’t ignore other obligations that await you along the way.
Once you’ve successfully found the property in your rental arbitrage Florida, it’s time to talk about the start-up costs.
It’s not a small deal. These costs will determine what you can afford and whether you should proceed with your business plan.
For most properties in Florida – and in other states, for that matter – you should focus on:
- Security deposit (one month ahead)
- First rent
- Possible legal fees
- Application fee
- Furnishings (either purchased or leased)
When you sum up the initial costs, you can spend anywhere between $3,000 and $10,000 at this stage.
List Your Property On Airbnb
Once you’ve come to the conclusion that rental arbitrage is, indeed, the right business move for you, and you’re sure you’ll make a profit, it’s time to post your property on Airbnb.
As with any other rental property listing, you need to optimize your content and supply it with high-quality pictures that represent your property in the best possible light.
The more appealing the property looks on Airbnb, the faster you’ll get feedback.
You should also consider using property management software to increase your revenue.
How Much Can You Make?
You’ve got the hint:
Rental arbitrage in Florida is a good business if you follow the steps we’ve outlined earlier.
However, you’re undoubtedly interested in some real numbers here.
For instance, let’s say you’re renting out a fully furnished duplex in Florida – and you put a price of $1,800 on it. You’re living on your own, so you decide to sublease the other part of your duplex on Airbnb.
If you list your property for $100 a day and get 80% occupancy, your rental arbitrage Florida can bring you an easy profit of $800 ($2,600 in revenue).
And you can redirect these $800 into repaying your loan, for example.
Best Areas To Invest In
Florida is a broad term – and not every destination here is meant to be used for short-term arbitrage properties.
The two most profitable areas you should invest in are:
- Panama City Beach
- Fort Lauderdale
Here’s what you can expect if you decide to invest in either of them.
Panama City Beach
First, let’s focus on some valuable information that can indicate the success of investing in this area.
- Area type: Vacation
- Short-term regulation summary: Friendly
- Average occupancy rate: 57%
- Average monthly revenue: $4,803
- Average market rent: $1,658
- Number of STR listings: Around 4,633
Ranking just below Panama City Beach as the second-best area to invest in rental arbitrage Florida is sunny Fort Lauderdale.
Here’s some follow-up information on the area.
- Area type: Vacation
- Short-term regulation summary: Friendly
- Average occupancy rate: 53%
- Average monthly revenue: $4,355
- Average market rent: $1,945
- Number of STR listings: 3,831
The Merits And Demerits Of Rental Arbitrage In Florida
It’s time to bring this issue to an end by mentioning the pros and cons of going with rental arbitrage Florida.
The Good Side?
Let’s start with the advantages:
- You don’t need to purchase the property: Perhaps the biggest perk of rental arbitrage is that you don’t have to own the property. In Florida, where property prices have only skyrocketed, this is one of the few clever ways to profit without huge investments.
- Low start-up costs: Since we’re talking about costs and your financial background, you won’t have to deal with extremely high start-up costs. Much of it depends on the condition of your property.
- Easy to get started: The hardest part is persuading your landlord to get on board with this business idea. Once you get past that, you just need to post your property on Airbnb and wait for the feedback to start coming in.
- You can use the property: If you rent a property during the holiday season, and it’s currently empty (or there’s a separate area that your residents don’t use), there’s no reason for you not to take advantage of it. It’s Florida we’re talking about here!
The Bad Side?
If we had to sum up the cons in one word, it would be – responsibility.
Firstly, you’re responsible for all the damage done by the renters. But then again, you could influence this by leasing to a particular category of people.
Also, there’s no certainty that bookings won’t fluctuate or that the process of finding the right property and landlord will take a lot more time and resources than you imagined. That’s why you should use our Airbnb calculator – and gain a better insight into the current state of the market.
Lastly, you’re responsible for utilities and cable bills, and you’ll be required to take care of the maintenance costs.
It seems like we’ve covered everything you should know regarding rental arbitrage in Florida.
We’ve established that it’s a form of sub-renting the property that you’ve already rented from your landlord. Of course, you have to get permission from them if you want your business to flow.
You’ll also need to check the profitability, local regulations, and seasonality of the area you’re planning to invest in here. This type of sub-renting property is legal in Florida – but you’ll still need to discuss some start-up costs and do your research.
If we’re being specific, Panama City Beach and Fort Lauderdale are the two most profitable you should be turning your attention to in 2022.
They’re perfect for short-term vacation rentals – and you can earn as much as $800 in profit.
It all seems easy until you start the process of searching for arbitrage rental properties. Don’t worry, though; Mashivor’s got your back. If you have any questions about this – or anything else real-estate-related – don’t hesitate to reach out! Start out your 7-day free trial with Mashvisor now.