Financial Coaching Blog,  Investing In Retirement

Airbnb Geoarbitrage

If you’ve followed us for awhile, then you know we’ve talked about vacation rentals/short term rentals as investments as well as the concept of Geoarbitrage. Today, we’re putting the two together to give you more reasons to invest in real estate & as an added bonus how you remote workers can travel without a RV, Van, or Bus.

Just a recap, Geoarbitrage is living in a low cost of living area (LCOL) while leverage your salary from a high cost of living area (HCOL). With the push in remote work, it will be interesting to see how employers may reduce employees salaries as a result, but currently it’s the best way to maximize your income to payoff debts & invest.

So what is AirBnB Geoarbitrage?

It’s the current travel trend as reporting by Airbnb’s CEO. Airbnb reported that as of Q1 this year, a quarter of its bookings were for stays of 28 days or more! Essentially what this means is that people who have become 100% home office workers have left the area they work in to work in short term rentals all across the country & not just in metros, but in dense suburban areas & even unique places like cabins & beach condos. People aren’t just traveling on Airbnb, they’re living on Airbnb! Booking extended short term stays consecutively! I mean, for many who were already digital nomads, this isn’t new per se, but using Airbnb as an extended stay rental program certainly is.

What does this mean for investors?

Money mostly. A good bit of it too. This essentially unlocks a new category of STRs for current & future investors. For the most part STRs have always been Vacation Rentals, but now with remote work front & center, STRs are now for digital nomads. If you are interested in traveling, but not sold on a RV, this is probably the next best thing! If you are a potential investor looking to generate income from a space you currently own or from an investment…

Now would best time.

Since 2017, we’ve seen a 120% loan to value appreciation with a 93% cash on cash return with our short term rental. We’ve also more than doubled our annual Net Income & hope to add some more STRs to the portfolio.

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