Why include a cash cushion?

A new listing can take weeks to get bookings and reviews, and rent is due either way. Two months of fixed costs is a starting point. Adjust it to the risk you can carry.

Do I get the security deposit back?

Usually at the end of the lease, if the unit is returned in good condition. It is still tied up for the whole lease, so count it as cash you need.

How much does furnishing cost?

It depends on size and quality. The furnishing cost estimator gives a room-by-room figure you can adjust.

What about permit and license fees?

They vary widely by city and some cities charge yearly. Enter the real figure from your city's official page.

Many operators form one to separate the business from personal finances. It is not always required. Ask an attorney or accountant what fits your situation.

Rental Arbitrage Startup Cost Calculator

Add up the cash you need before the first booking, with a low, base and high case.

Written by RentalArbitrage AdminUpdated: October 2026

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The monthly numbers get most of the attention, but many rental arbitrage units fail before they reach the first booking because the owner ran out of cash. This calculator adds up everything you pay before a guest arrives, then adds a cushion for a slow start.

What It Counts

Lease costs: security deposit and first month’s rent.
Setup: furnishing, photography, permits and licensing, LLC formation, starter supplies and the first insurance payment.
Cushion: months of fixed costs held in reserve.

Worked Example

With a $1,800 deposit and first month, $7,500 of furnishing, $300 each for photos and permits, $150 for an LLC, $250 of starter supplies, a $60 first insurance payment and a two-month cushion of $2,280 a month:

Total cash needed: about $16,720.
With $8,000 on hand, you would be about $8,720 short.
If setup items run 25% over, the total rises to about $18,845.

Where People Underestimate

Furnishing. Delivery, assembly and replacements add up. Use the furnishing cost estimator.
Permits. Some cities require inspections or annual renewals.
The first month. You pay rent before the listing has any reviews.

If You Are Short

Close the gap before signing, not after. Options include a smaller unit, buying furniture in stages, or negotiating a lower deposit. If you borrow, check that the unit’s worst case still covers the repayments.

Frequently Asked Questions

Why Include a Cash Cushion?: A new listing can take weeks to get bookings and reviews, and rent is due either way. Two months of fixed costs is a starting point. Adjust it to the risk you can carry.
Do I Get the Security Deposit Back?: Usually at the end of the lease, if the unit is returned in good condition. It is still tied up for the whole lease, so count it as cash you need.
How Much Does Furnishing Cost?: It depends on size and quality. The furnishing cost estimator gives a room-by-room figure you can adjust.
What About Permit and License Fees?: They vary widely by city and some cities charge yearly. Enter the real figure from your city's official page.
Do I Need an LLC?: Many operators form one to separate the business from personal finances. It is not always required. Ask an attorney or accountant what fits your situation.