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Does this arbitrage unit actually clear?

Enter the rent you would sign, what it costs to furnish, and the nightly rate the market supports. You get monthly cash flow, the occupancy you break even at, and how long the cash you put in takes to come back.

Monthly rent

What you sign for on the long-term lease.

Nightly rate

The average you expect across the year, not your summer peak.

Occupancy65%

Booked nights divided by available nights. In most US markets a decent unit lands between 55% and 75%.

Other monthly costs

Utilities, internet, insurance, software, supplies. Not the cleaning if guests pay for it.

Platform fee15.5%

Airbnb charges most hosts 15.5% of the booking subtotal.

Security deposit

Cash you hand over on day one and get back at the end, if you get it back.

Furnishing and setup

Beds, sofa, kitchen, linen, lock, photography. The cash you will never see again.

An estimate, not a business plan. It assumes cleaning is charged to guests and covers itself. Occupancy tax is excluded because Airbnb remits it in most markets.

Monthly cash flow

$321.55

Gross monthly revenue$3,161.60

19.8 booked nights$160.00 × 19.8

Platform fee at 15.5%-$490.05

Rent-$2,000.00

Other monthly costs-$350.00

Cash margin10.2%

Annual cash flow$3,858.62

Break-even occupancy57.2%

Cash to start$12,000.00

Payback38 months

Before you sign: the three things that kill an arbitrage deal

How it works

The three numbers that decide it

The rent you can actually sign

Not the asking rent on the listing. The rent a landlord will accept knowing you intend to sublet on a nightly basis.

A nightly rate you can defend

Pull the comparable units in the same zip code with the same bedroom count, then take the middle, not the best month of the best one.

Occupancy across twelve months

Including February. An arbitrage deal that works at 80% and dies at 55% is a bet on a market, not a business.

Where arbitrage deals actually fail

Almost never on the spreadsheet. The math is simple and most units clear on paper at the occupancy their operator assumed. The failures come from three places: a lease that never allowed subletting, a city ordinance that requires the operator to be the owner or the primary resident, and a season that arrived twenty points below the assumption.

The lease is the one to settle first, in writing, before any money moves. A verbal yes from a leasing agent is not permission, and a landlord who discovers nightly guests through a neighbor will not renegotiate. Ask for a written subletting clause naming short-term rental use, and expect to pay for it in rent or in a larger deposit.

The ordinance is the one people skip. Many US cities cap short-term rentals to a primary residence, which excludes arbitrage entirely, and several require the permit to be issued in the property owner's name. Check the ordinance before the lease, because there is no version of this where the ordinance loses.

Questions

Rental arbitrage, answered

What is rental arbitrage?

You sign a long-term lease on a property you do not own, furnish it, and rent it out nightly. Your margin is the gap between what you pay the landlord and what guests pay you, minus the platform fee and the running costs.

Is rental arbitrage legal?

It depends on two documents, and neither is Airbnb's terms. The lease has to permit subletting for short-term rental use, in writing. The city ordinance has to permit a non-owner to operate, which many do not: primary-residence requirements exclude arbitrage by design.

How much cash do I need to start?

Deposit, first month, and furnishing. On a $2,000 one-bedroom that usually lands between $8,000 and $14,000 depending on how far you go on furniture. Set the calculator to your real numbers and look at the payback line, not the monthly one.

What occupancy do I need to break even?

The calculator gives you the exact figure for your inputs. As a rule of thumb, a unit whose break-even sits above 55% is fragile, because that is roughly where a soft winter lands in most non-resort US markets.

Do I need the landlord's permission?

Yes, and in writing, naming short-term rental use rather than subletting in general. Operators who rely on a verbal agreement lose the unit and the furnishing cash when the building changes hands or a neighbor complains.

Does arbitrage still work in 2026?

In markets with a wide gap between long-term rent and nightly rates, and no primary-residence rule, the math still clears. In cities that tightened their ordinances, the deal is gone regardless of the spreadsheet. Check the ordinance first and the numbers second.

Sources

Airbnb Help Center, Service fees: 15.5% single host fee for most hosts. Read September 10, 2026.
Model assumptions: 30.4 nights of availability per month, cleaning charged to guests and treated as neutral, occupancy tax excluded because Airbnb remits it in most US markets.

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