🔍 How long will it take to break even on an Airbnb arbitrage business?

This calculator figures out the exact upfront capital you need to launch an Airbnb arbitrage business and exactly how many months of profit it will take to break even. In the arbitrage model, you rent a property and sublease it as a short-term rental. Determine your true sunk costs and evaluate your breakeven timeline so you can quickly recoup your initial investment.

The first part of your capital goes to securing the property. In the arbitrage model, you are renting the unit from a landlord, so you typically need the first month's rent and a security deposit.

As Jorge Contreras points out, the deposit is not really an expense because you're going to get that back at the end of your 12-month lease. Keep in mind it is refundable, so it is not a true sunk business expense.

Your true business expenses are the furnishings and decor. As Jorge Contreras notes, if you're starting with a smaller studio it could be anywhere around three thousand dollars just for furniture. For a larger 3-bedroom house, furniture alone could cost about $8,000.

Try to find properties that already include major appliances. Jorge Contreras emphasizes that it is pretty standard for a refrigerator and a stove to already be included, keeping thousands of dollars in your pocket.

Once you launch, your goal is to generate enough monthly cash flow to pay off those sunk setup costs in just a few months. As Jorge Contreras explains, if you are profiting $1,500 a month in cash flow, you would pay off a $5,000 setup cost in a little over three months.

If you use a 0% balance transfer to fund the physical items, you can use your cash flow to pay off that debt without tying up your own savings.