The newest trend in short-term rentals is Airbnb arbitrage

Airbnb arbitrage is a new trend in the short-term rental industry as entrepreneurial renters sublet their apartments or homes, charging nightly rates to make a profit that tops what they pay their landlords. 

Some renters engage in the subletting under the radar. Others broadcast it loudly, including on TikTok, sharing tips with followers and even offering paid courses on how to build your own short-term rental empire. 

One 21-year-old host who engages in the practice has nearly 50 properties for rent on Airbnb in Salt Lake City, Austin, and Nashville, which she manages from Florida while also working as a part-time, property-management coach. 

Airbnb arbitrage can conflict with local and state laws, especially in places like New York City, New York, where a new licensing law last year essentially banned whole-apartment rentals for less than 30 days. 

In some cases, hosts skirt the law to engage in arbitrage. In July, the self-proclaimed "Wolf of Airbnb,” Konrad Bicher, was sentenced to more than four years in prison for defrauding landlords and subletting New York apartments between 2019 and 2022 without permission.  

But Airbnb arbitrage is not strictly illegal. And in some parts of the country, less stringent short-term rental restrictions make it a viable option for entrepreneurs looking to build their own rental property business. 

Below, please find Property Guard's weekly short term rental regulation round-up, highlighting state and local news regarding short term rental regulations to regulate (or prohibit) Airbnbs and other STRs. If you want a comprehensive data solution on STR regulations in all 20,000 state and local jurisdictions, contact us here.

New and Proposed Regulations:

• Muskegon, Minnesota: City officials passed a new short-term rental ordinance capping the number of units that can exist in the city and other new rules, like allowing the transfer of STR licenses upon sale of a property only once. (link) 
• Narragansett, Rhode Island: A judge issued a temporary restraining order and preliminary injunction in a case brought by short-term rental property owners suing the town of Narragansett over a STR regulations proposal. (link) 
• Cincinnati, Ohio: Cities and townships in Butler County are exploring implementing new short-term rental regulations in response to listings growing by 77% since January 2023. (link)
  

Other Noteworthy News:

• Booking a spooky stay: The house that was the setting for the 1982 movie “Poltergeist” was sold, and the new owner plans to recreate looks from the film and operate the property as a short-term rental. (link)
• Jumping on the glamping train: For short-term rental owners, or property owners with extra land and an interest in STRs, glamping offers an opportunity to boost revenue. (link)