EP29: Step by Step Guide to Midterm Rental Arbitrage with Amelia & Grace
Hello everyone! This week we're going to talk about a very popular topic, arbitrage. More specifically we are going to focus on MTR arbitrage because that is the realm where the majority of our personal experiences lie. Rental arbitrage has become increasingly popular. It is what we would call a buzzword in the real estate world right now, and for good reason. Let’s dive in!
We do want to note that a lot of this information will also be helpful when it comes to short-term rental arbitrage as well because when it comes to MTR or STR arbitrage, the execution is nearly the same, either way. It can be a great way to first get started in REI and especially so if you don’t have a lot of capital to work with.
What is rental arbitrage?
Rental arbitrage is when you lease a property, then turn around and release it, typically as a mid or short-term rental. Think of it like flipping a lease, except you are the middleman. You are getting the initial lease from the owner, then turning around and releasing it for more money so you are making a profit.
What are the benefits of rental arbitrage?
It requires less capital to start
There is significantly less risk involved
They are very easy to start
Offers a high ROI
You can choose turnkey properties for quick setup
You can potentially land properties with low, to no maintenance, that you are responsible for since you do not own the property
What are the disadvantages of rental arbitrage?
No tax benefits since you are not the owner
Less control over the property
No control over neighboring tenants
You are subject to property rules and rent raises by the owner
If you are looking for a simple way to get started in REI but have low capital, arbitrage could be an excellent way for you to dip your toe into the industry, before taking the full dive.
Thanks for tuning in, we’ll catch you in the next episode!
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