More people than ever are looking for ways to earn income from short-term rentals – and not all of them want to buy a property.
We’ve had conversations with landlords, investors, and entrepreneurs who are weighing up two very different paths:
- Traditional holiday letting: Where you own the property outright and rent it out.
- Airbnb arbitrage: Where you lease a property long-term and sublet it short-term with the landlord’s permission.
Both models have potential. Both can generate income. But they come with very different risks, responsibilities, and realities.
So what’s the better approach in 2025? In this blog, mySTAYINN breaks down the pros and cons of each.
What is Airbnb Arbitrage?
In case the term is new to you, Airbnb arbitrage is a business model where you rent a property from a landlord and then list it on platforms like Airbnb or Booking.com, aiming to earn more from guests than you pay in rent.
You don’t need to own the property – just secure a favourable lease agreement and permission to sublet. Your profit is the difference between the rent and your short-let income (minus costs).
On paper, it’s a great way to start a property business with low capital. But in reality? It’s not quite that simple.
Holiday Letting: The Traditional Model
This is the model most people are familiar with. You own the property – either as a second home, an investment, or part of a broader portfolio – and you let it out to short-term guests.
You benefit from capital appreciation, long-term equity growth, and full control over the asset. But you’re also on the hook for mortgage payments, maintenance, and upfront investment.
Pros and Cons: Airbnb Arbitrage vs Holiday Letting
Airbnb Arbitrage
Pros:
- Low start-up cost – no need to buy a property
- Quick to scale with multiple properties
- Flexible – enter and exit markets more easily
Cons:
- Requires landlord permission (not always easy to get)
- No equity or long-term gain
- High churn and operating risk
- Lease obligations even if bookings dry up
Holiday Letting
Pros:
- Build equity and long-term wealth
- Full control of the asset
- Potential tax benefits and capital growth
- Often more stable long-term
Cons:
- Requires upfront investment or mortgage
- More exposure to market downturns
- Higher barrier to entry
There’s no one-size-fits-all answer here. Your choice depends on your goals, budget, and appetite for risk.
Legal and Financial Considerations
This is where things often get tricky. With arbitrage, you’re entering a grey area of legal and contractual responsibility. You must:
- Secure explicit written permission from the landlord
- Comply with any restrictions in the lease or building
- Ensure the property is legally eligible for short-term lets
- Take on insurance and liability obligations
Many landlords won’t go near arbitrage. And if you sublet without permission? You’re not just breaking the lease – you could be breaking the law.
With traditional holiday lets, your responsibilities are more straightforward. You’ll still need the right insurance, mortgage products, licensing, and compliance – but everything’s above board.
At mySTAYINN, we always advise owners to take a long-term view. Short-term income is great, but so is long-term security – and arbitrage doesn’t offer much of that.
Operational Realities: What Running Each Model Actually Feels Like
We’ve worked with both types of clients – and we can tell you, the operational demands are very similar. Both models require:
- Guest communication 7 days a week
- Professional cleaning and laundry
- Maintenance coordination
- Listings, pricing, and reviews management
- Legal compliance and safety checks
If anything, arbitrage can be more stressful. You’re often trying to manage more units with less margin, which means volume is essential, and one poor-performing property can quickly wipe out your profits.
Property owners, by contrast, have more flexibility. They’re often in it for the long haul, willing to invest in better furnishings or improvements – because they’ll reap the rewards over time.
At mySTAYINN, we take on all the operational stress for both groups. Whether you own or rent, we handle:
- Cleaning and guest services
- Dynamic pricing and revenue optimisation
- 24/7 communication and support
- Property setup and safety compliance
You can see everything we offer on our services page, including full management and hybrid support.
Who Should Consider Each Model?
We often get asked, “Is arbitrage worth it?” The answer depends on who’s asking.
Airbnb Arbitrage might suit:
- Entrepreneurs with low starting capital
- People with time to hustle and scale
- Risk-tolerant individuals who want fast growth
- Urban areas with high guest demand and low property prices
But it’s not ideal for:
- Passive investors
- Risk-averse landlords
- Anyone looking for long-term wealth building
Holiday Letting is better for:
- Property owners with unused or second homes
- Buy-to-let landlords seeking higher yields
- Investors looking for hands-off income
- People planning to hold property for years, not months
We’ve seen many arbitrage operators start out with energy and ambition, only to burn out when they hit operational bottlenecks. Owning the asset gives you more options, more resilience, and a stronger foundation.
Why Expert Management Matters Either Way
Whether you’re a holiday let owner or an arbitrage operator, one thing is certain – you can’t do it all yourself.
Short-term letting in 2025 is a full-time business. Guest expectations are sky-high. Local regulations are tightening. And reviews can make or break your listing.
That’s why more and more hosts – regardless of business model – are turning to experts to handle the day-to-day.
At mySTAYINN, we support:
- Property owners with one or more holiday lets
- Landlords exploring short-term strategies
- Entrepreneurs running multiple units through arbitrage
Our focus is always on delivering exceptional guest experiences and sustainable income for you – whichever model you’re using.
In Conclusion: Ownership or Operation?
Airbnb arbitrage might sound appealing, especially with its low upfront costs and quick setup. But don’t underestimate the risks – legal, financial, and operational.
Traditional holiday letting offers more stability, more control, and the chance to build real, lasting value. It’s not as flashy, but it’s far more resilient.
If you’re new to short-term lets and unsure which path is right for you, start with your goals:
- Want to build a long-term income stream? Holiday letting is your best bet.
- Looking to test the waters or build a cash-flow business? Arbitrage could work – if you do it by the book.
And remember – whatever you choose, expert support can make the difference between a side hustle and a serious success story.
We’ve helped dozens of hosts get started – from first-time owners to experienced operators. If you’re ready to build a short-let business in 2025, we’d love to hear from you. Book a free consultation to see how mySTAYINN can support your holiday let or Airbnb arbitrage venture – and help you get it right from day one.
