Short Term Rental Riches 144. When do the expensive markets make sense?
Investment philosophies should always revolve around returns that’s why we normally recommend areas of the US where the rent to value ratio (amount of rent we get back vs. purchase price) is higher. If you evaluate properties using this metric it’s an easy way to rule out a lot of areas; typically the areas with the highest cost of living. But when can these SAME CITIES actually make sense? Let’s talk about rental arbitrage and how the areas for rental arbitrage are often the opposite of the areas you would want to purchase or invest in but can still make you a fortune.
- Why some markets are bad places to purchase but better for lease arbitrage
- A few examples of cities
- How we can calculate to know for sure
- Lease considerations if you decide to go this route
- The operations are the same
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Check out this older Airdna report on the Best Markets for Lease Arbitrage in the US which is still relevant today (unless regulations have changed in the cities).