Risk: High

Rental arbitrage involves leasing properties to sublease them for short-term rentals at a higher rate. Beginners in this venture could potentially lose money due to several factors. They might lose money upfront on setup costs for furnishing and listing the property, time spent on property management, energy dealing with guest issues, and confidence if they face unexpected challenges or financial losses. Some beginners have spent money on setup costs without achieving profitable bookings or facing unexpected expenses. Startup costs for rental arbitrage can be significant and may not pay off if the property doesn't generate enough rental income. Online discussions mention instances of people failing or losing money due to high competition, low occupancy rates, or unexpected property-related costs.