Learn what Airbnb rental arbitrage is, if you're ready to jump into this growing business opportunity, and which markets are best suited for short- and long-term leasing.

Airbnb Rental Arbitrage: A Data-Driven Guide for 2022 & 2023

Airbnb Rental Arbitrage in 2020: Where to Make Money Without Buying Property

Arbitrage can seem like a big, intimidating topic, but it's actually far less complicated than you might think. And it has proven to be a lucrative business move for vacation rental hosts across a wide variety of markets.

In short: Airbnb rental arbitrage is the act of renting a property long-term and then re-renting it short-term on vacation rental sites like Airbnb or Vrbo. 

For example, let’s say you rent an apartment on a long-term lease for $2,500 per month. Subletting the same apartment as an STR at a rate of $200 per night could earn you more than you pay in rent—and in less than two weeks. Any further STR income within the month would be profit for you, minus expenses. STR arbitrage opportunities depend on that difference between what you are paying for a long-term rental (LTR) and what you are earning in STR rent.

Airbnb rental arbitrage is not only legal, but it has been widely adopted, with benefits for STR operators, apartment owners, and building residents.

Many apartment owners understand that a resident’s rental arbitrage business brings increased occupancy, meaning more income for both the long-term renter and, in turn, themselves. Rental arbitrage allows apartment owners to share in profits from these opportunities. It also enables them to diversify their rental income. 

Building owners can use Migo by RealPage to monitor and monetize home-sharing activity in their buildings. However, each party should sign a rental arbitrage contract prior to engaging in practice. It’s also a wise investment to look into ​​rental arbitrage insurance. Migo helps apartment owners to facilitate this as well.

But it’s not all for the apartment owner. Vrbo or Airbnb rental arbitrage provides an additional amenity for other long-term renters in the building. (Wouldn’t it be great to have an STR unit in your building for your in-laws to use next time they came to visit instead of using your fold-out couch?) Residents should keep this in mind when discussing the prospect with their apartment owner and frame it as a win-win for both parties.

As of the third quarter of 2022, there were over 660,000 multifamily listings in the U.S. listed on Airbnb or Vrbo as short-term rentals (STRs). Listings in multifamily buildings are primarily split between condominiums (condos), where they are typically owned by an individual, and apartments, which are usually owned and managed by large institutional companies who subsequently rent individual units out to tenants. 

Condos are typically found in coastal destinations like Myrtle Beach, South Carolina; Panama City, Florida; and Gulf Shores, Alabama, and have seen a strong recovery in their supply of available listings after a fall in supply during the height of the pandemic in 2020. There are now 11% more condo listings than in 2019. 

Apartment listings, on the other hand, are primarily located in major metropolitan areas, which were hit particularly hard by the pandemic, and are where available short-term rental listings are still 7% below 2019 levels. 

Demand for stays in apartment listings is rebounding but remains about 10% below 2019 levels as guests have yet to fully return to major metro areas at the levels they were prior to the pandemic.  

Looking at the apartment leasing market, after a notably strong summer for rent growth and record high occupancies, rents are now cooling some after peak rent growth of 15.7% in March 2022 dropped to just 9% in September, according to RealPage Market Analytics. 

Both demand and rent remain in flux for both the long-term and short-term rental industries, but opportunities do exist for renting apartment units as short-term rentals (known as the apartment rental arbitrage model). Having the right data can provide a good start in finding a rental arbitrage property.

Multifamily listings—primarily located in apartment buildings—are concentrated in the largest U.S. cities, and our analysis includes data on 34 U.S. markets with the most STRs and their submarkets. (LTR rates and occupancy levels are provided by RealPage Market Analytics and Migo, while short-term rental performance comes from AirDNA.) Both include data from 2017 through 2022, and RealPage’s market and submarket geographic definitions were used for both datasets for added consistency.

To be included in the analysis, a submarket needed to have more than 20 total active STR listings throughout the five-year period and at least 10 listings of an individual bedroom type to return results and ensure small samples of listings didn’t skew the results. We analyzed the revenues excluding cleaning fees, taxes, and other fees, with the assumption that those additional costs would be added to the rental rate to cover those expenses. 

It's important to account for additional expenses necessary to successfully manage an STR property, such as start-up costs (appliances, furniture, decor, and licensing and legal fees) as well as ongoing costs like utilities, maintenance, toiletries, and insurance. Given the variable nature of these expenses, they were not included in our analysis.

Across the 34 markets, the number of short-term multifamily rental listings dropped by just 2% over the past two years but with a significant divergence across markets. Large urban coastal markets saw steep declines in listings, falling by more than 25% in Boston, Seattle, Los Angeles, and New York. On the other hand, listings in Dallas, San Antonio, and Jacksonville, FL, grew by more than 40% over the same period.

There are many factors that may have contributed to the changes in listing activity, including:

New regulations in markets like Boston and Los Angeles

The closing of STR companies like Lyric and Stay Alfred 

New and growing groups like Sonder, Mint House, and Vector Travel

The evolving economics of STR opportunities

Prior to 2021, there was very little correlation between annual percent change in the average revenue per listing earned in the LTR and STR markets, and all markets in prior years generally showed a positive average arbitrage opportunity. That changed throughout the pandemic, as the rents and revenues shifted dramatically. In its wake, demand patterns changed for both the multifamily housing and lodging industries. 

In cities like New York and San Francisco, apartments saw increases in vacancies and declines in effective rents, reducing the average effective rent by 10% to 25%, depending on the size of the unit. This decrease correlated with a significant drop in the revenue earned from STRs over the same period. Given the larger decline in revenue earned for lodging uses, any potential for rental arbitrage appears to have vanished in these markets. Since then, a modest recovery in short-term rental revenue has meant that all markets now show at least some premium for short-term rental arbitrage.

In an opposite but similar vein, demand for both lodging and housing has increased dramatically in many U.S. cities. Demand for STRs in coastal destinations was up over 40% in the second quarter of 2022 versus 2019. That increased demand helped edge the revenue earned per unit even higher for these markets. In 2022, apartment rents increased substantially throughout the year, with rents rising by more than 25% in markets like Miami, Orlando, Savannah, and Fort Lauderdale.  

What were the best cities for Airbnb rental arbitrage in 2022?

The table below ranks the 34 largest markets with multifamily STR listings, revealing the best cities for Airbnb rental arbitrage. You can sort by LTR rates and—the ultimate determining factor—arbitrage potential. Use the filters to switch between bedroom types (studio, one bedroom, two bedrooms, three-plus bedrooms) and the market average.

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Topping the lists again in 2022 were familiar markets. In analyzing the same data over a five-year period, the five markets that would average the highest rental arbitrage premium continue to include Nashville; New Orleans; Savannah, Georgia; Charleston, South Carolina; and Jacksonville, Florida. Reflecting the risk associated with rental arbitrage, only Jacksonville has seen significant gains in multifamily listings since 2018 as new regulations have likely reduced other markets’ growth potential. 

Most markets (21 out of 34) saw an increase in revenue potential from rental arbitrage as short-term rental revenues increased in the vast majority of the 34 markets in 2022.

Best areas for Airbnb rental arbitrage opportunities

To give a better understanding of how rental arbitrage may pencil out at a more granular level, we have provided the following tool that allows you to look at average LTR and STR listings’ performance at the submarket level, which submarkets rank at the highest for rental arbitrage opportunity, and which ones have emerged over the past year. Use the dropdowns to filter to a specific market and bedroom count. 

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What is the formula for successful Airbnb arbitrage?

Ultimately, every deal is different, and it's important to remember that the data presented in this analysis represents the average performance of properties in that market or submarket. There are pockets of potential opportunity in all markets. On average, a market might appear unappealing, but all markets have combinations of submarkets and bedroom types that could succeed. 

No single property’s performance matches the submarket or market average, and each property should be analyzed separately. Some tools to help with a more detailed analysis include:

Rentalizer: By analyzing the booking activity of over 10 million vacation rentals globally on Airbnb and Vrbo, Rentalizer can predict what any home around the world would earn as a vacation rental.

MarketMinder: Gain valuable insights into the performance of over 10 million vacation rentals across 80,000 cities worldwide. Study the critical trends in your market over the past three years to understand exactly how the STR industry is evolving.

Migo: Partnered with Airbnb, Migo facilitates home-sharing in multifamily buildings, allowing owners to enable, monitor, and monetize home-sharing activity on Airbnb. Migo has a proprietary revenue calculator (located on Migo.com) that can accurately estimate an owner's home-sharing income for any property based on address and unit mix.

RealPage Market Analytics: This multifamily market intelligence platform provides full visibility into market, business, and asset performance, enabling stakeholders to view, visualize, and leverage insights, information, and reports at market, submarket, and property levels.


The larger the unit, the greater the rental arbitrage opportunity. The STR premium increases by an average of 55% for a studio apartment; 62% for a one-bedroom; 82% for a two-bedroom; and 143% for a 3-plus bedroom apartment.

3. Part-time rental arbitrage offers renters opportunities

With the recent rise of remote work, both before and accelerated by the pandemic, more workers have increased flexibility, enabling them to work anywhere with a stable Wi-Fi connection. Renters who want to get into the rental arbitrage business only when traveling have new opportunities as of 2022.

In many submarkets throughout the U.S., renters can rent out their apartments for as few as five nights per month to cover an entire month’s rent—an incredibly alluring prospect for renters in some of the country’s most expensive cities. 

With any sort of real estate arbitrage, there are inherent risks and a long list of cautionary stories. It is essential to understand the data and how and why the arbitrage opportunity might be temporary. Economic theory suggests that arbitrage should only be temporary and that the market will adjust to supply/demand pressures.  

In our multifamily example, that would be through a reduction in supply of available apartment units, increasing the rent for all apartments, and thus reducing the profit opportunity. As more units are added to an area, that may also increase competition for guests, which can lead to discounting and a reduction in the overall revenue potential for an STR. Other risks can come from new city or state regulations and even changing policies from the building owner.  

Why starting a rental arbitrage business doesn’t have to be complicated

With many rental arbitrage opportunities available across the country, there’s likely never been a better time to get into the space. Like any other venture, there’s due diligence to perform and tools to explore to ensure a successful endeavor. 

That’s where Migo and MarketMinder come in. Migo brings apartment owners and residents together in the rental arbitrage venture, while MarketMinder gives renters the data they need to optimize their pricing strategy to capitalize on revenue opportunities for themselves and their apartment owners. 

Data makes the difference, and Migo and MarketMinder are powered by the most reliable data in the STR space to help optimize rental arbitrage businesses.

Discover the ins and outs of rental arbitrage, its legal status, and how you can leverage it to get your Airbnb business started today.

Airbnb Rental Arbitrage: A Data-Driven Guide for 2022 & 2023

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