AirDNA and RealPage partner to outline rental arbitrage landscape

US: Short-term rental data and analytics provider, AirDNA, has partnered with real estate and property management software, RealPage, to provide insights and interactive tools to help renters and owners capitalise on rental arbitrage. 

Long-term rental rates have grown more than ten per cent in a third of US metro areas in the last year, while short-term rental demand, after dropping 50 per cent in 2020, has rebounded phenomenally, leading to a new record high of 70.2 per cent in occupancy in June 2021.

The inaugural joint report between AirDNA and RealPage highlights the new landscape of rental arbitrage, including which cities have the highest revenue potential and how the pandemic caused major shifts in rates, demand and traveller tastes.

AirDNA CEO Scott Shatford said: “The rental arbitrage model has really taken on a new form in 2021. What was once seen as ‘house hacking’ has now become a fully streamlined, transparent way for renters and owners to both benefit from flexible living – especially with tools like Migo.”

For owners and renters of multifamily apartments using Migo, RealPage’s new flexible living platform that enables and streamlines multifamily home sharing on Airbnb, these trends are welcome news.

AirDNA and Migo present a fresh list of the best cities for rental arbitrage, showing some familiar favourites like Savannah, Charleston, New Orleans, Nashville, and Jacksonville. San Diego is also new to the top of the list, with four per cent annual growth in apartment rents.

Richard Chandler, director of data and product at Migo, said: “Covid has completely upended how the multifamily industry looks at rental arbitrage. The largely defunct master lease model, where the property owner’s risk was minimal, has been replaced with a ‘revenue split’ model where both parties take a simple cut of any income generated.

“Any owners looking to benefit from the substantial returns from home sharing must now also share in the risk. Understanding and maximising the rental arbitrage is now critically important to property owners in our industry – hence Migo’s strong ties with AirDNA,” he added.

The reports also contains interactive tools to help you find the best niche for rental arbitrage comparing effective rent growth, short-term rental revenue growth and more by neighbourhood and bedroom count. In general, the larger the unit, the greater the arbitrage opportunity – the premiums for short-term rental revenues jump from 46 per cent for a studio apartment to 140 per cent for a three-plus bedroom.

Follow this link to read the report in full.