How to start rental arbitrage

Choose a single city or suburb where short lets are permitted and demand is not purely seasonal. Read the local permit or registration requirements before anything else — the rules decide whether the market is workable at all.

Take twenty actual rental listings and put each one through a calculator: rent, likely nightly rate, occupancy, cleaning per turnover, platform fees and running costs. You are looking for a break-even occupancy comfortably under 60%.

Most units fail this test. That is normal — the filtering is the work.

Expect deposit plus first month's rent, furniture and linens, photography, and a reserve covering two to three months of rent. For a one or two bedroom that is commonly the equivalent of $8,000 to $15,000 all in.

Approach owners and letting agents with a clear pitch, and get short-term subletting written into the agreement. Never rely on a verbal yes.

Furnish for durability and photographs. Price aggressively for the first three weeks to build reviews, then raise rates. Watch occupancy weekly against the break-even figure from your original analysis and adjust before a soft month becomes a loss.