Airbnb Arbitrage Explained

Airbnb arbitrage is a business model where you rent a property long term and then re-rent it short term on platforms like Airbnb to capture the price difference as profit. Unlike co-hosting, you are the tenant taking on the lease and financial risk, not just managing someone else’s property for a commission.

How arbitrage differs from co-hosting

In co-hosting, you do not sign the lease or own the property; you manage someone else’s listing and earn a percentage of booking revenue as a service provider. By contrast, arbitrage operators act as “tenant-entrepreneurs,” taking on the lease, setting up the unit, and keeping 100% of the upside after paying rent and expenses.

Financial risk and responsibility

With arbitrage, you owe full rent every month regardless of how many bookings you get, so vacancy risk and seasonality fall on you, not on the property owner. You also cover furniture, setup, cleaning, guest damage (beyond any coverage), and ongoing operating costs, which increases both risk and potential upside.

Aspect Airbnb Arbitrage

Airbnb Co-HostingWho controls lease Arbitrage operator signs the long-term lease. Property owner keeps the lease or title; co-host has no lease obligation.Main income model Profit = STR revenue minus rent and all expenses. Commission (percentage of revenue) for management services.Capital required Higher: first month’s rent, deposit, full furnishings, setup. Lower: usually minimal upfront cost, mostly time and systems.Risk level Higher: still pays rent even with low occupancy. Lower: income fluctuates, but no fixed lease payments.Owner relationship Landlord–tenant; owner gets fixed rent. Service provider; owner shares revenue and keeps property control.When arbitrage makes sense