Airbnb arbitrage payback
| Inputs |
Value |
Quick note |
| Setup capex |
₹300,000 |
Furniture, appliances, decor, photography |
| Projected monthly booking subtotal |
₹100,000 |
Use a normal month, not your best month |
| Monthly rent |
₹50,000 |
Fixed payment to landlord |
| Monthly operating costs |
₹12,000 |
Cleaning, utilities, wifi, consumables, repairs |
| Airbnb host fee |
15.5% |
Single-fee model; deducted from host payout |
| Residual value of setup |
25.0% |
Assumption: value you can recover on exit |
| Occupancy / revenue stress |
100.0% |
100% = base case; try 80% for a stress test |
| Secured lease / lock-in |
11 months |
Months of contractual certainty |
| Monthly economics |
Value |
Note |
| Stressed booking subtotal |
₹100,000 |
Projected bookings × stress factor |
| Airbnb host fee |
(₹15,500) |
Deducted from host payout |
| Host payout after Airbnb fee |
₹84,500 |
|
| Rent |
(₹50,000) |
|
| Operating costs |
(₹12,000) |
|
| Cash left each month |
₹22,500 |
Amount available to recover capex |
| Payback test |
Value |
Note |
| Effective capex at risk |
₹225,000 |
Setup capex less assumed residual value |
| Payback period |
10.0 months |
Effective capex ÷ monthly cash left |
| Lease / lock-in |
11 months |
|
| Payback vs lease |
Tight |
|
| Gross booking-to-rent |
2.0x |
Useful spread check; not a universal benchmark |
Rule of thumb
For an 11-month lease, I would personally want payback around 6–7 months — or negotiate a longer lock-in.
Example: ₹100 booking subtotal under Airbnb's 15.5% single host fee → about ₹84.50 host earnings before taxes/other adjustments. Source: https://www.airbnb.com/help/article/1857 Built by @iamsatyavyas
