Interested in making some extra cash? With the rise of the sharing economy, more and more people are turning to Airbnb to make money from their homes. By renting out spare rooms or even entire apartments, Airbnb hosts can earn a healthy return on their investment. And with hundreds of millions of guests using the Airbnb platform every year, there’s no shortage of potential customers for short-term rentals.
There is, however, a common misconception that you can only benefit from the Airbnb platform if you own property. And that often holds people back – especially those who haven’t yet got their foot in the property market.
There are some clear benefits to starting an Airbnb business without owning property.
For example, you could start an Airbnb experience business, which would involve leading activities or tours for guests visiting your city. Or another popular business strategy that eager investors can employ is subleasing.
Here’s what you need to know.
Airbnb Rental Arbitrage – A.K.A “Subleasing” in the Vacation Rental Industry
The term “arbitrage” refers to taking advantage of price discrepancies in different markets. In the case of Airbnb rental arbitrage, investors take advantage of the fact that rental prices on Airbnb are often significantly higher than traditional long-term lease rates.
By entering into a sublease agreement with a property owner, investors can secure a property below-market rates and then turn around and rent it out at a higher rate on Airbnb. You can even rent multiple properties to sublease.
While subleasing is above board, it’s only legal if the property owner agrees. In this instance, you’ll generally have to sign two agreements: one agreement would be the lease agreement which will specify that you need to pay the agreed-upon rental rate each week, and the other would be the subleasing agreement stipulating that the owner has explicitly agreed to have you list the property on Airbnb.
You want these agreements to be airtight and cover all relevant legal considerations, so make sure to speak to a qualified legal expert about commercial subleasing agreements.
Beyond considering the legalities around subleasing, you must also consider the risks attached to this business model.
For example, your Airbnb bookings will likely fluctuate – so you’ll have to fit the bill for the rent in the months when you have no bookings at all. You’ll also be responsible for any property damages that Airbnb guests may cause.
It’s worth keeping in mind that running a successful Airbnb business and being an Airbnb host is a full-time job. If you’re looking to generate a passive income that can eventually help you fund your own property, you may want to consider getting an Airbnb property management team on board.
A dedicated property manager can take over all the day-to-day operations and optimise your listing so that you rent the property as often as possible.
If you want to find out more, GrowHOST has a team of expert property managers who can help you take your subleasing endeavour to the next level. We offer a plug-and-play service to help you get the most out of your listing, from finding and getting guests to cleaning and maintaining the property between stays.
With years of experience in the Hotel Industry, we know how to maximise occupancy and returns and ensure a high standard of guest satisfaction.
Contact us today to find out more.
You might also be interested in reading our guide to the Best Places to Invest in Airbnb for 2023
Become an Airbnb Experience Host
Do you have a particular skill or passion you’d like to share with the world? Maybe you know a lot about your city and want to show visitors its best features? If so, becoming an Airbnb Experience Host might be a great way to invest in the short-term rental market without owning a property.
Launched in 2016, Airbnb Experiences is a platform that allows people to connect with locals and book unique activities. From cooking classes and wine tastings to city tours and hikes, there’s an experience for everyone. As a Host, you can choose when, where, and how often you want to host an experience.
You have to remember, though, that for the safety of people using Airbnb Experiences, you must go through a strict vetting process. And depending on the activity you’re offering, you might have to apply for a specific licence or follow certain local laws.
The Australian Business Licence and Information Service can help you find out more.
Consider Co-Hosting Vacation Rental Properties
As an Airbnb co-host, you would be responsible for managing the listing and communicating with guests on behalf of the property owner. This would include handling reservations, coordinating check-in and check-out, and providing local recommendations.
In exchange for your services, you would receive a percentage of the rental income. For many people, this arrangement has several advantages over owning an Airbnb property, including needing little to no capital because you’re not buying a property outright.
It also allows you to work with multiple property owners and manage multiple listings. And since you’re not responsible for the property itself, this is a low-risk way to get started in the world of Airbnb investing.
Key Takeaways
There are many ways to get involved with Airbnb without owning any property yourself. From subleasing and rental arbitrage to becoming an experience host or co-hosting, there’s sure to be an option that fits your interests and investment goals. So if you’ve been thinking about trying your hand at making money amongst Airbnb business owners but don’t own any property, now you know it’s still possible.
If you decide to go the subleasing route, or if you have an Airbnb property of your own, and would like to explore how GrowHOST can help with your property management needs, feel free to get in touch today.