Arbusers

Anyone practicing it?

How does it work?

Next up: mineral water arbitrage in street stands.

ex-hft wrote: ↑

Fri Feb 23, 2024 5:46 pm

Next up: mineral water arbitrage in street stands.

You made my day much more humorous

straili wrote: ↑

Fri Feb 23, 2024 6:07 am

Anyone practicing it?

I know many old-timers who created a good capital from arbing and they later moved to the real estate when betting became tougher. Some of them are now practising rental arbitrage or Airbnb arbitrage if you prefer. I am told about some unreal profits but I believe these profits will not be sustainable after the end of 2025 when the business cycle and the real estate cycle ends.
Even though I know many details of how to practice it, it would be better to ask someone who is an expert to post here.

@ straili

Are you referring to renting properties from the long-term rental market and resell them on the short term marketplace?

If that is the case, it has been common practice in Greece for a long while now especially from real estate agencies who already have eyes on the rental market creating secondary companies that would sublet properties either on small scale or entire buildings that would be transformed to hotel rooms.

When it comes to subletting there is a law requirement for the minimum contract length. This is important consideration given where we are in the housing cycle for your ROI, but I am not the expert to comment on that.

What can I definitely say having skin in the game is that the returns although still significant are less due to competition and government intervention.

I received a business offer from an American friend who is practising Airbnb arbitrage in the states and looking to expand overseas. He quickly explained his technique without getting into details. With a small capital he is making some 700K annually so the opportunity looks unreal. It is an asymmetrical bet to use arbusers words.

As far as I understand even if you have governmental intervention in one country, there is nothing to stop you to invest in another country, especially if we are talking about the EU. Even if you are Greek, you can invest in Prague or Warsaw where I suppose the markets are not that mature yet.

And yes, I m referring to this technique where you lease a place and then sublet it to the retail client, tourists.

straili wrote: ↑

Sun Feb 25, 2024 6:13 am

And yes, I m referring to this technique where you lease a place and then sublet it to the retail client, tourists.

It's neccessary to take a look on the regulatory system of the country.
For example in Spain, it's totally forbidden to sublet a place that you have rented before.

straili wrote: ↑

Sun Feb 25, 2024 6:13 am

I received a business offer from an American friend who is practising Airbnb arbitrage in the states and looking to expand overseas. He quickly explained his technique without getting into details. With a small capital he is making some 700K annually so the opportunity looks unreal. It is an asymmetrical bet to use arbusers words.

As far as I understand even if you have governmental intervention in one country, there is nothing to stop you to invest in another country, especially if we are talking about the EU. Even if you are Greek, you can invest in Prague or Warsaw where I suppose the markets are not that mature yet.

And yes, I m referring to this technique where you lease a place and then sublet it to the retail client, tourists.

I would just mention that it is very far from the concept of arbitrage. You risk that you will not be able to find tourists for the apartments, that you will break the contract and receive fines from the owners of the apartments, you will break the laws and other fines. And we don't need to talk about events like covid, where you will have a legal obligation to pay rent, but tourists are nowhere to be found.

I live in a city very popular with tourists and I know a few people who have done it. But it has many disadvantages and will lead to many conflicts with the owners of other apartments in the building, the city, the apartment owner....

Disclaimer, I am not an expert.

In classic sports betting arbitrage, there are several techniques you could follow to exploit the system. It is not just one. The same applies to airbnb or rental arbitrage. Here is one technique someone I know follows:

He created a calendar of dates that cities and venues of big events will be announced. (i.e Champions League final, Euroleague final four, Eurovision, concerts of megastars, etc).
He has a list of properties he is willing to rent beforehand, usually the properties are in walking distance or 1-2 metro stations away. If he is able to book electronically the minute of the announcement he is booking immediately. If not, he contacts the owners early in the morning of the next day.
The desired performance he is looking for is more than 300% per transaction. On the negative side this performance materialises later. In most cases, he will get paid 1-2 weeks, or 1-2 months later, when laggards wake up and will look for the same opportunity. If the performance is not achieved, he is willing to wait more and very sporadically he is forced to wait 1-2 months before the event.

There are good and bad things in this:
1. The administrative work is bigger. Communication with owners can be cocky many times. A supportive team is needed.
2. Governments can change things overnight, especially those governments that vote for a new tax law every 2 months on average. (Yes, there are EU countries voting on average 1 tax law every 2 months)
3. In very rare occasions the venues/and the cities are changed.
4. Black swan events can take away much of your efforts.
5. The profits are unreal. I mean unreal.

This thing started in Dubai with the property boom and the ridiculously easy money made with no effort. So called influencers advertised it in IG and elsewhere. It then spread like a fire in the US. And now it is Europe's time. Some countries are more mature than others. I believe there is still very good money to be made in countries with no maturity.

Lastly, the real estate has a cycle too. On average it is much bigger than the cycle of the stock markets, but in my view these cycles are now starting to align. At the end of 2025, the music will stop playing and everyone should have a chair to sit.

I m probably one of the founding members of the forum but with a new profile.
I was lucky to experience the golden years of arbing and value betting. Still practicing occasionally but rental arbitrage is my main focus these years as I also experience the golden years of real estate in my country as well.
My trick is to identify bottle neck situations. Imagine the following example. It could be anything.
I was expecting the European championship of ...... to be announced and one of the favourite cities was a small one somewhere in Europe with a beautiful lake. Just 100m away from the venue there was a 5 star hotel that would normally host the executives and the teams who wanted to secure minimum fatigue for their athletes. The next 5 start hotel was in the city centre 30 minutes away by car. I booked 40 rooms at once the day of the announcement. I achieved a 600% performance. Cashed out early and moved to the next.
Rental arbitrage has the advantage that you don't need to be 12 hours per day in front of screens. Compare it with sports arbitrage if you can.

Doar pentru tine wrote: ↑

Sat Mar 02, 2024 11:17 am

I booked 40 rooms at once the day of the announcement. I achieved a 600% performance. Cashed out early and moved to the next.

How do you resell those hotel rooms once you book them? Does your company contact the potential clients? Or just list them on some platform?

Doar pentru tine wrote: ↑

Sat Mar 02, 2024 11:17 am

I m probably one of the founding members of the forum but with a new profile.
I was lucky to experience the golden years of arbing and value betting. Still practicing occasionally but rental arbitrage is my main focus these years as I also experience the golden years of real estate in my country as well.
My trick is to identify bottle neck situations. Imagine the following example. It could be anything.
I was expecting the European championship of ...... to be announced and one of the favourite cities was a small one somewhere in Europe with a beautiful lake. Just 100m away from the venue there was a 5 star hotel that would normally host the executives and the teams who wanted to secure minimum fatigue for their athletes. The next 5 start hotel was in the city centre 30 minutes away by car. I booked 40 rooms at once the day of the announcement. I achieved a 600% performance. Cashed out early and moved to the next.
Rental arbitrage has the advantage that you don't need to be 12 hours per day in front of screens. Compare it with sports arbitrage if you can.

How or which platform did you use to sell the 40 rooms?

Also I've seen cases of hotels realising that they can make way more money on a specific date and cancelling the reservation under any premise (similar to a bookie voiding a bet ). Wouldn't you be held responsible if you already sold the booking to someone else?

I didn't use any platform. I contacted the federations of the sport and sold them directly to them.
I am not selling immediately to the clients. The prices are better when you get closer to the events but I also dont like getting that close. So I prefer selling after 1-2 months to get the money and move to the next. So far no hotel did something bad to me, but I also make sure that I will not fall without a fight. I also have a clause in the contracts to the buyers to be 100% covered if something bad comes up.

If I judge from the frenzy that I see in IG and elsewhere, I understand that we are nearing a cycle end.
Models, athletes, escorts, TikTokers, everyone is in this business. It will not go on for long.
The real estate has it's now cycles. On average they are longer than the average stock market cycle and thus people do forget that it is not only up and up, there is some down some times. I am old enough to remember the 2007-2013 crisis in the real estate. I suppose it will be repeated at a time in a couple of years.