- Saadia Touzri and Roman Renn sublet seasonal rental properties according to a “rent to rent” strategy.
- They earn up to 25,000 euros per month in income, reinvesting a large part in the business.
- The couple shared tips for finding properties and building a successful vacation rental business.
This is an edited and translated version of an article which originally appeared on May 30, 2022. The insider verified his earnings with documentation.
Saadia Touzri, 28, and Roman Renn, 30, met in Stuttgart, Germany in 2017.
In early 2020, the couple began renting properties and subletting them for short-term rentals using Airbnb and Booking.com. This investment strategy is called “rent to rent” or “rental arbitrage”. The couple rent a property, furnish it and make it more attractive to vacationers, then rent it out short term at higher rates.
Touzri and Renn have 10 rental listings on their website and earn between 15,000 and 25,000 euros per month, or about 16,000 to 27,000 dollars, by subletting them. They said the monthly operating costs were around 7,500 euros.
“Our dream was to be able to work from anywhere in the world if we wanted to,” Renn told Insider in an interview.
They started by using their savings to rent a single apartment in early 2020 and subletting it when they both had full-time jobs. They reinvested nearly all income into renting and furnishing each new property and quickly moved on.
The operational side of the business – managing properties – only takes up three to five hours a week, Renn said, adding, “It’s almost passive income.”
Touzri, his partner, is still at another job, while Renn has been working full-time on their rental business since October, managing the properties and looking for new investments.
They only take 1,500 euros each as a monthly salary. Renn described the salary as a “misery” considering the size of their company, StayINZ.
They reinvest most of the money back into the business to find and renovate new properties for their growing portfolio.
Avoid big cities where competition is fierce
Touzri said the key to the couple’s success has been avoiding classic German Airbnb cities like Hamburg or Berlin, where competition is very high.
She said they decided to focus on smaller, developing regions that competitors have ignored, such as the Black Forest in western Germany. The couple are also looking for rental properties in areas that attract tourists – the Black Forest is ideal for hiking.
Touzri told Insider they were able to gain an edge in those kinds of areas after noticing that other vacation homes were outdated and “outdated.” They furnish and do minor renovations to make sure their accommodations look modern.
“It’s always important to us that properties have something that other properties don’t have,” Renn added. They are looking for properties with a swimming pool, a roof terrace, a sauna or a unique view.
Renn and Touzri advised anyone looking to start a vacation rental business to avoid choosing locations with a lot of competition. They added that finding places you can drive to from your home within two hours is a big plus.
Negotiating a sublease can be tricky
They said that once they find a property they want to invest in, negotiating the sublet with the landlord is the most crucial part. Many landlords don’t want to rent out their property to people who want to sublet it as a vacation home.
“Every landlord reacts differently,” Touzri said, adding that some landlords and property managers worry that constantly having new guests “will cause chaos in homes.”
The couple stressed the need during the negotiation to address any concerns the landlord had about subletting.
Touzri added that the easiest landlords to deal with are those who only own the properties as an investment and don’t live nearby. “They are confident that we will take care of the property and keep an eye on it,” Touzri said.
That is why they advised to research the owners before starting negotiations.
If a rental contract is concluded, the next phase is to renovate and furnish the apartment. The couple replaces everything that’s broken, repaints the walls, sometimes renovates the bathrooms and furnishes the property.
Renn said that at first he had to install baseboards or grout tiles himself to save costs.
Consider operating costs when setting your prices
Once the apartment has been refurbished, the couple offers it via booking portals including Airbnb and Booking.com. Renn said three-quarters of their bookings come from Booking.com.
They said it’s important to calculate running costs — such as cleaning, rent and utilities — and factor them into the price of your short-term rental.
They added that booking platforms also charge a commission, which can be up to 40% on sites like Booking.com.
The couple advised people wanting to start a short-term rental business to start making calls. “Even if you don’t have references yet, you should approach people and ask if it’s possible to sublet a property,” Renn said.
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