Studios and 1 BR in Albuquerque or Nashville

[Tausha3]

Hello everyone!

I am thinking about getting into rental arbitrage but I want to start small. Would it be bad to start off with a studio or one-bedroom unit? The two markets I am most interested in at the moment are Albuquerque, NM and Nashville, TN. I live in CA so I’m thinking I would manage the property remotely after working with a real estate agent to find a homeowner who would be willing to rent their property to me for STR.

Any guidance or feedback on this would be most appreciated as I have no experience in this space.

Thanks in advance!

Tausha

[Guy991]

Hello @Tausha3 ,

Renting the property is the easiest part. But who will handle the cleaning, maintenance, and check-in? You'll likely need a local co-host (taking around 15% of your income) near the property. The smaller the unit, the harder it is to find someone to manage it. Considering all the costs involved in running a single studio apartment remotely, I'm not sure it will be profitable. Even if it is, having a poorly managed property with low ratings isn't worth it. You might end up renting it out long-term, which isn't necessarily a bad thing, but our focus here is on short-term rentals.

Starting small means finding a property nearby that you can manage yourself, so you'll learn the ins and outs. Then, you can scale up with more units and hopefully enlist co-hosts further away to work for you.

[Helen3]

I would disagree @Guy991 in many countries finding a landlord willing to let you do arbitrage is the hardest part.

Most landlords wouldn't want to put their properties at risk by doing so .

as you know arbitrage often invalidates building insurance of those doing arbitrage can't take out home insurance for short term lets 

why do you think estate agents will help you find landlords willing to let you do arbitrage @Tausha3