How to Write a Rental Arbitrage Business Plan

What rental arbitrage actually is

In rental arbitrage you lease a property from an owner, then re-rent it — usually as a furnished short- or mid-term stay — and keep the spread between your rent and your nightly revenue. You don't own the asset, so startup costs are lower, but your margins are thinner and your success depends entirely on the numbers and the landlord's written permission.

The non-negotiable first step

Get the owner's written consent to sublet and operate short-term rentals, and confirm the city's zoning and permit rules. Skipping this is the fastest way to lose the unit and your deposit.

The financial model

Build a simple monthly projection:

• Revenue = average nightly rate × nights booked (use a conservative 60–70% occupancy, not peak).
• Fixed costs = rent, utilities, internet, insurance, software, and any HOA fees.
• Variable costs = cleaning, supplies, platform fees, and restocking.
• Startup = furniture, linens, deposit, and first-month rent.

If the unit doesn't clear a healthy margin at conservative occupancy, walk away.

The rest of the plan

Cover your market and competition, your guest profile, pricing strategy, a furnishing budget, your operations (cleaning turnovers, check-in, maintenance), and a downside plan for slow months. Lenders and landlords both want to see that you've stress-tested the model — so show the math at 50% occupancy, not just your best case.