ποΈRental Arbitrage
In the short-term rental (STR) space, rental arbitrage means acquiring a residential or corporate lease with a sublease addendum to allow us to operate our business model. In simple terms, we rent properties instead of buying them, and we get approval from the owners to be able to rent them out to others. We take the utmost care of their properties as we are using them for our business because we want them to remain profitable. When our team talks about property acquisition we mean with this rental arbitrage method, not buying real estate. We partner with property owners and sign long-term contracts to ensure consistent growth. We then furnish the property with high-quality interior design. We get great photos of the unit and upload them to our channel manager where we connect the units to different rental sites like Airbnb, VRBO, and our own branded website.
We maintain cleaning and maintenance services to take care of the properties and have several local business on call should any unforeseen problems arise. If a property has special amenities like a pool or a fountain we keep someone on hand to service them as well.
We will be looking to acquire 5-15 units at a time to allow for economies of scale to reduce our operating costs. In terms of cash flow, these units will produce roughly $1000-$2000 profit per unit each month with an average of 36-43% profit margins depending on the specific property, amenities, seasonality, and other factors. We are confident in our numbers as we routinely run them before entering a market and combine them with an understanding of the seasonal demand in that area.
As an NFT holder, you will receive a quarterly report that will show the funds and what they are being used for in relation to the project. We aim to be as transparent as legally possible.
This project will start out in the United States in major metropolitan cities in relation to STR regulation and the average daily rates we are seeing in the market. We will focus on mixed-use/ commercial zoning as the regulations are not as strict since hotels are likely in the area. After the first year or 500 units are reached with this project we will explore worldwide opportunities in South America, Europe, and more.
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