Rental arbitrage — leasing a property long-term to sublet on short-stay platforms — is an emerging model in Zanzibar for entrepreneurs who want to participate in the tourism accommodation market without purchasing property.
The Model
1. Lease a villa or apartment on a long-term basis.
2. Furnish and stage the property professionally.
3. List on Airbnb, Booking.com, and other short-stay platforms.
4. Generate rental income exceeding your lease costs.
Zanzibar Considerations
- Seasonality: Revenue varies significantly by season.
- Management: Professional property management is essential.
- Regulatory: Ensure lease agreements permit subletting.
- Competition: The market is competitive in peak areas.
Viability
Arbitrage can work in high-demand areas like Paje and Nungwi with careful financial modelling and professional execution. However, property ownership remains the more established investment path.