I'm looking into airbnb arbitrage, London

[Ellenah0]

I'm thinking of renting a seperate flat/ studio in London for the purpose of airbnbing (with the landlords permission)
Can someone with experience with this talk me through the process of setting this up/getting all the relevant checks and docs in order?

[Mike-And-Jane0]

@Ellenah0 As London short term rentals are limited to 90 days it is highly unlikely you can make this work.

[Ellenah0]

I've seen a few other hosts who sublet their airbnbs in London, so i know people are doing it - I just need to know how they achieve it with all the relevant permissions

[Helen3 · Accepted solution]

Your biggest problem will be finding a landlord willing to let you sublet for STRs @Ellenah0 

Of course there are many owners who do STRs within the 90 days and other types of lets outside of the 90 days.

What  checks and  documents are you referring to. You can do your market research by looking at The PInk Book produced by the English Tourist Board.

[Mike-And-Jane0]

@Ellenah0 You will not get the relevant permissions. You can, of course, do what some hosts do and break the law but the consequences are quite severe once you are caught.

[Helen3]

Why don't you ask them how they got permission to do arbitrage then @Ellenah0 

[Mar125]

@Ellenah0 

I don’t suggest you do it if it’s offline arbitrage. 

Im no way a UK guy, but the real estate  law in the US shares many things in common with the UK system.

An airbnb arbitrage is essentially a physical swap of residence. and it’s hard to define if a house is worth another house. Since you can not define every details of a house, a swap is essential a non executable contract. 

On the other hand, you can just book an airbnb for the desired place and rent out your place. 

Don’t do the swap. It’s not executable so it’s basically not giving you any right. So, if some accident happens at the new place,you are not protected. 

[Darren402]

@Ellenah0 I own several rental flats in London that I have let out for the past 25 years. I have also been involved in the maintenance and management of hundreds of flats in London. I have never encountered an owner who would hand-over their property for Airbnb "arbitrage". These are some of the reasons:

1) If the owner of the flat, "the Landlord", enters into a rental agreement with you, then you become their tenant. If you then sub-let the flat to a third-party e.g. an Airbnb guest, the Landlord has no agreement with the guest. If a problem arises, then the landlord is powerless to evict the guest. No sensible landlord would want to relinquish control of their property.

2) All flats in London, and I suspect most places in the world, are governed by head-leases which almost always prohibit the running of a business from that flat. They allow for long-term letting to tenants, but prohibit running of a business such as sub-sub letting for holiday stays; what you refer to as "Airbnb Arbitrage".

3) All the above not withstanding, holiday lettings of flats in London are limited to a maximum 90 days per annum. Making Airbnb Arbitrage an unviable business model.

As you say, people do it. People break all sorts of laws every minute of every day.  I'm sure you can buy all sorts of credible-looking courses on the internet telling people how wonderful it is. in short, it's dodgy.  If you want to lose money quickly by doing something silly, perhaps buy some crypto-currency or subscribe to a Ponzi scheme. 

[Heather289]

If you rent a flat, your lease will definitely prohibit you from doing this.  So you'd have to do it behind the back of your landlord and hope you did not get caught.  

If the flat is in a block of flats, there'll probably also be a rule about not doing short term holiday lets in the building, and the neighbours are likely to see if people keep arriving from foreign countries with suitcases, and report you to the landlord.  

You'll probably invalidate the insurance contract in the building if the freeholder doesn't disclose your activity to the insurer. 

Your landlord would be within his rights to tear up your lease and keep your deposit.   As you don't live there, no eviction is needed, so he wouldn't even have to go to court - he'd just change the locks. 

Of course, you can give it a go, but remember that at any point, the locks may get changed, all your bookings cancelled (and Airbnb will charge you a fine for cancelled bookings) and you will get no deposit back.   Or worse.  

[Darren447]

Hi @Ellenah0,

Did you ever move forward with this? I'm looking at the same thing.

I believe in never listening to the naysayers, especially if none of them are doing what you want to do! Interested to find out how you moved forward.

[Helen3]

You're unlikely to find those doing arbitrage in this community @Darren447  if you don't believe in listening to experienced hosts and landlords who understand the barriers to arbitrage then join a local arbitrage group.

[Darren447]

Hi Helen, Thanks for your input,

I understand this isn't the community for that, hence my message was to @Ellenah0

Regards.

[Ollie212]

Hey Ellen,

Did you ever ended up doing this and, if so, how is it going? I'm looking to get into it in London too. 

Cheers,

Ollie. 

[Paula]

Hi @Ollie212, I am tagging @Ellenah0 here so they receive a notification of your message. This way, we increase the chances of them getting back to us.

Quick tip: To tag someone, tap "@" and select the host's username from the dropdown menu 😊