Homeownership in the United States has, for many, felt more like a pipe dream than a realistic aspect of the American dream since the recession of 2009. This sentiment is no longer a hunch; it's written in the numbers, according to a 2019 study from ATTOM Data Solutions. Since owning a house is more expensive than it has ever been, rental arbitrage has never been more tempting.
Here's where we stand: house prices are outpacing incomes in 80 percent of the 755 counties studied around the region. In the nation's 18 most populated counties, as well as 37 of the 40 counties with a population of at least one million inhabitants, renting a house is now more economical than owning one (93 percent).
The investment real estate market is undergoing a dramatic transformation, with incomes and home prices diverging in opposite directions. Purchasing a home with the intention of flipping or renting it out is no longer as easy as it once was. What is Airbnb arbitrage is the main thing to be discussed here.
Buying a house, on the other hand, is by no means a prerequisite for short-term holiday rentals.
What is Airbnb Rental Arbitrage, and how does it work?
The act of renting a property long-term and then re-renting it on websites like Airbnb and HomeAway is known as "rental arbitrage." Rental arbitrage is a business strategy that takes no capital, generates positive cash flow, and involves much less risk — and it's completely legal. We've got you covered if you're curious how to launch an Airbnb company or thinking about getting into Airbnb arbitrage. The best passive airbnb options in the United States are mentioned below especially rental arbitrage Houston.
Methodology for Airbnb Rental Arbitrage
We used long-term rental data from a 2019 report from the US Department of Housing and Urban Development for this research. We then filtered for destinations with at least 100 active listings using Air DNA’s short-term vacation rental data for two-bedroom properties from approximately 3,000 counties. The study rates counties in the United States based on the disparity between short-term RevPAR and long-term, lease-style rental income.
States with the Most Rental Arbitrage Potential
Starting at the state level, the chart below highlights the states with the largest average arbitrage opportunity counties. Hawaii counties are at the top of the list, with short-term holiday rentals earning an average of $3,079 more than a typical month-to-month contract.
Tennessee ($2,620), Wyoming ($2,492), Michigan ($2,353), Colorado ($2,341), Pennsylvania ($2,060), and Massachusetts ($2,059) are all near behind.
When it comes to the top 100 counties for Airbnb rental arbitrage, some states clearly outperform others as rental arbitrage houston. In several Midwest states, there isn't a single county that isn't part of the state.
Counties with the Fastest Growth Rates: Emerging Markets for Rental Arbitrage
Looking at the list above isn't going to help holiday rental professionals draw on the best up-and-coming markets. Sure, recognising that Maui is at the top of the list is comforting, but what if you're not near Maui? Instead, before we look at the total top counties, let's have a look at the areas where short-term rental development has soared in recent years — the areas with the biggest discrepancies between 2018 and 2019 arbitrage opportunities.
On the negative hand, there are certain counties in the United States that investors can avoid. Long-term rental prices, on the other hand, have risen. Although long-term rental prices in many of these counties have stayed stable, short-term revenues have plunged for various reasons.
Florida's Gulf County is at the bottom of the list, an area that was especially hard hit by Hurricane Michael in October of 2018.