Everyone’s costs for getting started in Airbnb through arbitrage are going to be different. However, it can help to know what others have spent to get an idea of what to shoot for. So that’s what this article aims to do: to help you estimate how much it will cost you to get Airbnb arbitrage. We’ll be using exact numbers from our startup costs to help paint a picture. Let’s get started.
Rent + Unchangeable Expenses
There are quite a few things to consider when looking at startup and operating costs for Airbnb arbitrage. Here’s a breakdown of everything we paid upfront and a rough monthly estimate of total costs:
Startup Costs
| Item | Cost |
| First, last, security deposit | $6675 (one month rent is $2225) |
| Water deposit | $150 |
| First month lawn maintenance | $100 |
| Internet | $65 |
| Insurance | $90.75 |
| Total Startup | $7080.75 |
Ongoing Costs
| Item | Cost |
| Rent | $2225 |
| Water | ~$60 |
| Electric | ~$200 |
| Monthly lawn maintenance | $100 |
| Internet | $65 |
| Streaming (Netflix + Hulu) | $25 |
| Insurance | $90.75 |
| Total Ongoing | $2765.75 |
Since we’re talking about starting out with Airbnb, we won’t use the above table too much. But it’s good to know what you’re getting into. This can help to plan in case you have a slow month or need to block off some dates.
Taking the number from the first table, we’re at $7080.75.
Furnishing Costs for Airbnb Arbitrage
Now comes the fun part! Furnishing your property is a really cool experience, but it can also be very expensive. Keep in mind a few things:
- This is our property and may not be fully representative of what you’re going to experience. This is a 2 bedroom 2 bathroom and we were going for a minimalistic style. Essentially a hotel room but with extra basic necessities (cookware, patio, washer/dryer, etc.). Everything is clean, free of clutter, and because of that, lightly decorated. So take that into account when estimating your property!
- You will spend extra money. It’s almost inevitable. For example, we forgot that you’re supposed to put things on nightstands. Say, a lamp. Not very fun for the guest to have to get up and turn the light off or not be able to charge their phone in the master bedroom. So be prepared to spend a bit extra on items you weren’t originally planning for.
After going through all of our bank statements and tallying everything, it looks like upfront we spent $6,208.90.
Note: I also included extra items such as internet setup in the cost breakdown since they’re necessary but don’t need their own breakdown.
Keep in mind again this was a 2 bedroom 2 bathroom house. We didn’t have anything really unique (think a game room) and lightly decorated. After our first year’s experience we would also recommend adding something like that to stand out.
So for basic items, look to spend about $4,000-$10,000 depending on your design choices and size of property. Then add extra for any game room, hot tub, outdoor space, etc. that you want to go above and beyond for.
Saving Money While Starting An Airbnb
There’s not too much you can do about changing the price of rent. In fact, you may even pay a bit more in rent in some cases (only use extra money as a last resort!). However, there will be opportunities for you to save money while furnishing.
The biggest way to save is thrifting. It can be difficult to find high quality furniture for a decent price while buying new. Thrift stores allow you to purchase furniture that is reasonably priced. And you’ll be able to check on the quality and condition of things beforehand, so if it’s not in good shape you can move on.
We made Goodwill our best friend when looking for smaller items (such as art). We mainly used Amazon, Wayfair, Walmart, and TJ Maxx for our furniture but we paid extra for it. The downside of thrifting is that it takes extra time. It can be all too easy to scroll through entire websites of inventory and have them delivered to your doorstep. But if you’re on a strict budget make those trips to thrift stores and save big. Don’t forget about garage and estate sales either!
The Final Damages
So after everything with setup, our final numbers are:
Rent Setup – $7080.75
Furnishing Setup – $6,208.90
This brings our grand total to $13,289.65. I feel confident that you can get these numbers lower by purchasing used items through thrifting. Another thing to keep in mind here is since you’re running an Airbnb, you’ll be keeping the property in top shape. This will help get your security deposit back.
Finally, I want to highlight the need for extra cash reserves or credit limits. It’s a great idea to have a month or two (at least) of ongoing costs in the reserve in case there are slower months. We personally experienced this during the summer months. You can get by with having enough limits on your credit card, but it will make things smoother if you can have the cash in your account. This will be to the tune of $4,000.
This breakdown is for our first ever Airbnb through arbitrage. As we move forward we’ll be posting similar breakdowns of our additional properties. We hope this helps you get started!