Airbnb Arbitrage Due Diligence Checklist
A practical checklist for reviewing short-term rental opportunities before signing a lease.
This resource is designed for serious property decisions: repair planning, maintenance review, owner communication, turnover preparation, inspection follow-up, and investment due diligence.
How to Use This Resource
- Walk the property slowly and document each issue with photos where helpful.
- Separate safety, water intrusion, electrical, HVAC, plumbing, structural, and access issues from cosmetic improvements.
- Assign each item a priority: urgent, pre-occupancy, 30-day, 90-day, annual, or future improvement.
- Use the notes area to capture vendor questions, owner decisions, budget assumptions, and follow-up actions.
- For unclear conditions, request review from the appropriate licensed professional or qualified trade partner.
Lease, Legal & Permission Review
- Confirm short-term rental use is allowed in the lease in clear written language.
- Verify whether landlord approval is general, property-specific, or revocable.
- Review subleasing, guest use, commercial activity, noise, parking, occupancy, pet, smoking, and event restrictions.
- Check city, county, HOA, condo, apartment, and zoning rules before spending money on setup.
- Confirm business license, tax registration, tourist development tax, sales tax, and platform compliance requirements.
- Identify cancellation rights, notice periods, renewal terms, rent increases, and early termination penalties.
- Request written clarification for any lease language that could restrict short-term rental operations.
Financial Due Diligence
- Estimate conservative Average Daily Rate using comparable active listings, not best-case examples.
- Model occupancy at conservative, expected, and optimistic levels.
- Calculate monthly rent, utilities, internet, streaming, supplies, cleaning, laundry, insurance, platform fees, software, maintenance reserve, and replacement reserve.
- Calculate break-even occupancy before projecting profit.
- Estimate startup cost including deposits, furniture, linens, kitchen stock, smart locks, photography, signage, consumables, repairs, and contingency.
- Compare payback period against lease length and renewal risk.
- Reject or renegotiate any deal that only works under perfect occupancy or unrealistically low expense assumptions.
Property Condition & Maintenance Risk
- Inspect HVAC age, air flow, filter size, service history, thermostat function, and replacement risk.
- Review plumbing fixtures, drains, shutoff valves, toilets, water heater age, leaks, water pressure, and visible water damage.
- Review electrical panel condition, outlets, GFCI protection, lighting, exterior outlets, smoke detectors, and carbon monoxide detectors.
- Inspect roof, ceilings, windows, doors, exterior drainage, grading, balconies, stairs, handrails, and trip hazards.
- Check appliances, laundry, garbage disposal, locks, garage door, Wi-Fi location, and guest access logistics.
- Document flooring, drywall, paint, cabinetry, bathroom condition, odor, pest indicators, mold indicators, and cosmetic repair needs.
- Estimate first-year maintenance exposure before signing the lease.
Guest Readiness & Operations
- Confirm parking, entry path, lock access, lighting, trash pickup, laundry setup, storage, supply restocking, and cleaning access.
- Check whether furniture layout supports guest count without creating wear, safety, or complaint issues.
- Plan linen sets, towel inventory, mattress protection, kitchen inventory, maintenance supplies, backup consumables, and locked owner storage.
- Confirm internet strength, thermostat control, smart lock compatibility, exterior cameras where allowed, and noise monitoring compliance.
- Create a turnover process for cleaning, laundry, inspection, restocking, damage review, and maintenance reporting.
- Identify the local vendor plan for urgent maintenance, lockouts, HVAC, plumbing, electrical, cleaning, lawn, and pool needs.
Decision Scorecard
- Proceed only if permission, numbers, condition, startup cost, and operations are all acceptable.
- Renegotiate if rent, repair obligations, startup cost, or lease restrictions create weak margins.
- Investigate further if local rules, HOA terms, insurance, utility responsibility, or maintenance exposure are unclear.
- Pass if the property depends on unrealistic revenue, unclear permission, heavy deferred maintenance, or poor guest logistics.
- Record final decision, required repairs, estimated startup budget, expected launch date, and owner/landlord commitments in writing.