This guide is designed for operators running rental arbitrage listings on Vrbo who use QuickBooks for their accounting. Rental arbitrage on Vrbo is a business model in which an operator signs a master lease with a property owner and then subleases the property to guests on Vrbo. This model works best in markets where short-term rental income on Vrbo exceeds local long-term rental rates.
Because margins depend heavily on accurate financial tracking, maintaining a clear and automated accounting system is essential to the success of your operations. In this guide, you’ll learn how to set up and automate accounting for Vrbo listings under the rental arbitrage business model using QuickBooks.
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NOTE: In this guide, we only cover income accounting, not costs. For a guide about Vrbo costs and chart of accounts to consider, check out this guide instead: Vrbo Costs and Chart of Accounts to Consider
The rental arbitrage business model offers several compelling advantages. In markets where Vrbo demand is strong and long-term rental rates are relatively low, operators can achieve gross profit margins of 30–50% – and in some areas, even higher. This far exceeds the typical 15–20% commission earned under a standard Vrbo property management model. Additionally, arbitrage operators maintain greater control over the property because they are legal tenants under a master lease. This reduces the administrative overhead of dealing with owners, eliminates the need to provide monthly financial reports, and allows the operator greater freedom to run the business without owning the property.
However, this model also carries risks. The operator is responsible for paying fixed rent regardless of market conditions. In a downturn (or if travel demand declines) revenues may drop while rental obligations remain unchanged, causing margins to shrink quickly. Conversely, during strong market periods, owners may raise rents unless protections are built into the lease, which can further erode profitability. Operators also typically bear the upfront cost of furnishing the property, unlike property managers who may share or pass these costs on to the owner.
Here’s what you’ll get from this guide:
There are other business models that may be more suitable in your particular scenario, which are covered better in the following guides:
In this section, we’ll go over the details of our QuickBooks chart of accounts template for Vrbo listings under the rental arbitrage business model:
| No. | Account | Type |
|---|---|---|
| 24000 | Rental Liability | Liability |
| 24210 | Rental Liability: Vrbo Taxes Payable | Liability |
| 42000 | Rental Revenue | Revenue |
| 42310 | Rental Revenue: Vrbo Income – Accommodation Fare | Revenue |
| 42320 | Rental Revenue: Vrbo Income – Cleaning Fee | Revenue |
| 42330 | Rental Revenue: Vrbo Income – Other Fees Collected | Revenue |
| 42610 | Rental Revenue: Vrbo Refunds | Revenue |
| 51000 | Rental Costs | Cost of Service |
| 51110 | Rental Costs: Vrbo Base Commission Fee | Cost of Service |
| 51120 | Rental Costs: Vrbo Payment Processor Fee | Cost of Service |
NOTE: In this guide, we only cover income accounting, not costs. For a guide about Vrbo costs and chart of accounts to consider, check out this guide instead: Vrbo Costs and Chart of Accounts to Consider
To learn more about each specific account code, we’ve listed each definition here:
Rental Liability
24000 – Rental Liability – This is a parent account with child accounts that account for rental liabilities.
24210 – Rental Liability: Vrbo Taxes Payable – This represents all Taxes collected from Vrbo and payable to a tax authority.
Rental Revenue
42000 – Rental Revenue – This is a parent account with child accounts that account for rental revenue.
42310 – Rental Revenue: Vrbo Income – Accommodation Fare – This account tracks the accommodation fare portion of each Vrbo reservation. The accommodation fare is equal to the number of nights multiplied by the average nightly rate of each reservation.
42320 – Rental Revenue: Vrbo Income – Cleaning Fee – This account tracks the cleaning fee portion of each Vrbo reservation.
42330 – Rental Revenue: Vrbo Income – Other Fees Collected – This account tracks any other fees collected from Vrbo.
42610 – Rental Revenue: Vrbo Refunds – This account tracks refunds executed by Vrbo.
Rental Costs
51000 – Rental Costs – This is a parent account with child accounts that account for rental costs.
51110 – Rental Costs: Vrbo Base Commission Fee – This account tracks service fee costs from Vrbo for each reservation, which is subtracted from the income.
51120 – Rental Costs: Vrbo Payment Processor Fee – This account tracks payment processor fees from Vrbo for each reservation, which is subtracted from the income.
For the scope of this guide, we’re mainly focused on Vrbo revenue recognition. It is important to point out that our template does not include many general accounts. We also make reference to some accounts not included in this particular template, which we’ll list here:
Here’s how to import the above chart of accounts template. The chart of accounts discussed in this article can be imported into QuickBooks automatically using Tallybreeze’s setup tools. Here’s how to access this utility…
With Tallybreeze, you can automate the accounting of your Vrbo listings so that you can focus on building a more profitable business. We’ll discuss how to use the preset settings in this section, which are designed for syncing reservations for a rental arbitrage business model. Here we’ll make use of the chart of accounts discussed above.
Once you’ve connected your Vrbo and QuickBooks accounts, Tallybreeze will guide you through setting up your listing’s accounting rules for rental arbitrage. You can also edit these presets if needed before enabling them for automation.
Explanation of Preset Lines
In this business model, everything collected from Vrbo is yours. This includes the accommodation fare, cleaning fee, Vrbo base commission fee (subtracted), payment processor fee (subtracted), any other fees collected and any taxes payable (if they exist)
| Vrbo Price Item | % | Account |
|---|---|---|
| Accommodation Fare | 100% | 42310 – Rental Revenue: Vrbo Income – Accommodation Fare |
| Cleaning Fee | 100% | 42320 – Rental Revenue: Vrbo Income – Cleaning Fee |
| Other Fees Collected | 100% | 42330 – Rental Revenue: Vrbo Income – Other Fees Collected |
| Taxes Collected | 100% | 24210 – Rental Liability: Vrbo Taxes Payable |
| Vrbo Base Commission Fee | 100% | 51110 – Rental Costs: Vrbo Base Commission Fee |
| Vrbo Payment Processor Fee | 100% | 51120 – Rental Costs: Vrbo Payment Processor Fee |
Let’s say you have Tallybreeze set up for this listing using the preset settings above. Let’s say Vrbo sends a payout for a current reservation with the following itinerary price items:
Tallybreeze accounts for all the income received by Vrbo, separating out each price item. The total amount to be received from Vrbo for this reservation is $2440, which is allocated to the Vrbo Payment Clearing Account to be later reconciled against the resulting bank deposit.
| Account | Debit | Credit |
|---|---|---|
| 42310 – Rental Revenue: Vrbo Income – Accommodation Fare | $2000 | |
| 42320 – Rental Revenue: Vrbo Income – Cleaning Fee | $300 | |
| 51110 – Rental Costs: Vrbo Base Commission Fee | $30 | |
| 51120 – Rental Costs: Vrbo Payment Processor Fee | $30 | |
| 24210 – Rental Liability: Vrbo Taxes Payable | $200 | |
| 11100 – Vrbo Payment Clearing Account (Asset) | $2440 |
On the date the reservation payout is received from Vrbo into your Operations Bank Account (3-5 days later), a bank rule in QuickBooks can automatically reconcile the amount back to the Vrbo Payment Clearing Account:
| Account | Debit | Credit |
|---|---|---|
| 1XXXX – Operations Bank Account | $2440 | |
| 11100 – Vrbo Payment Clearing Account (Asset) | $2440 |
The best way to manage your guests in QuickBooks is by creating a general customer in QuickBooks for these transactions, we recommend calling it “Vrbo Guests”. However, if you prefer, you can set the guest as the customer in Tallybreeze. In such case we’ll create each guest as a customer in QuickBooks and will set them as the customer of the invoice for each reservation.
If you have more than one listing, you’ll also want to create a class category for each listing in QuickBooks, many users will literally name the class category using the address of the listing. Then we recommend to place each listing class category under a parent class category called “Arbitrage”. Click below to see an example:
With Tallybreeze, you’re also able to automate the creation of additional bills and invoices for each reservation. Consider the following:
All of the above settings can be quickly set up using Tallybreeze’s presets for your listings. Here’s how to set up these presets…
From here, presets will be loaded as your listing accounting rules and you can edit as needed.
The following is a list of common transaction workflows for rental arbitrage in QuickBooks.
Owners receive a fixed rent each month, which means it’s easy to create a recurring payment. Each rent payment can be reconciled to “5XXXX – Master Lease Rent Payments”.
You, the rental arbitrage operator, are paying the owner, Claudia Smith, $2000 rent per month for the property located at 212 Chantilly Way through a recurring bank transaction which happens monthly. Once the transfer is posted and complete, reconcile the outgoing transaction from the Operations Bank Account using the following entry:
| Debit | Credit | Class Category | |
|---|---|---|---|
| 1XXXX – Operations Bank Account (Asset) | $2,000 | Arbitrage: 212 Chantilly Way | |
| 5XXXX – Master Lease Rent Payments (Cost) | $2,000 | Arbitrage: 212 Chantilly Way |
Detailed instructions for QuickBooks Online
1. Create a Recurring Bill
| Vendor | Category | Description | Class |
|---|---|---|---|
| Claudia Smith | 5XXXX – Master Lease Rent Payments | “Master Lease Rent Payment” | Arbitrage: 212 Chantilly Way |
2. Pay the Bill
Pay the Bill directly in QuickBooks or reconcile the Bill against the payment made in your bank feed.
If you need to purchase maintenance items and pay for it quickly, you may need to do so with the funds in your operations bank account. If your rental agreement allows, when rent is due again after paying off this expense, remove those additional monies from next month’s payment going towards landowner(s).
A property owned by Claudia Smith needs a bathroom faucet to be replaced by a professional plumber. The service costs a total of $200 and needs to be rectified quickly as there are guests checking in later in the day. You also charge a 20% markup for allocating funds and administering the service for the owner.
First, you’ll need to pay the plumbing company from your Operations Bank Account either via bank transfer, ACH, check, Venmo or other means. Once the transaction is posted and complete, record the outgoing transaction from your Operations Bank Account using the following entry:
| Debit | Credit | Class Category | |
|---|---|---|---|
| 1XXXX – Operations Bank Account (Asset) | $200 | Arbitrage: 212 Chantilly Way | |
| 7XXXX – Billable Expenses (Expense) | $200 | Arbitrage: 212 Chantilly Way |
When you pay your next rent payment (rent is $2000), subtract the amount billed plus a 20% markup. This equals a payment of $1760 ($2000 – $240 = $1760). Once the transaction is posted and complete, record the outgoing transaction from the Operations Bank Account using the following entry:
| Debit | Credit | Class Category | |
|---|---|---|---|
| 1XXXX – Operations Bank Account (Asset) | $1760 | Arbitrage: 212 Chantilly Way | |
| 5XXXX – Master Lease Rent Payments (Cost) | $2000 | Arbitrage: 212 Chantilly Way | |
| 4XXXX – Billable Expenses Income (Revenue) | $240 | Arbitrage: 212 Chantilly Way |
Detailed instructions for QuickBooks Online
1. After paying the service provider, categorize and reconcile the transaction in your operations bank feed
| Payee | Category | Description | Amount | Class |
|---|---|---|---|---|
| Plumber Pro | 7XXXX – Billable Expenses (Expense) | “Billable Expense: Bathroom Faucet Replaced” | $200 | Arbitrage: 212 Chantilly Way |
2. Subtract amount when making the next rent payment and reconcile as follows
Rent is $2000. Upon payment, subtract the amount billed plus a 20% markup. This equals a payment of $1760 ($2000 – $240 = $1760). Once the transaction is posted and complete, record the outgoing transaction from the Operations Bank Account using the following entry:
| Payee | Category | Description | Amount | Class |
|---|---|---|---|---|
| Claudia Smith (Owner) | 5XXXX – Master Lease Rent Payments (Cost) | “Rent Payment for 212 Chantilly Way” | $2000 | Arbitrage: 212 Chantilly Way |
| Claudia Smith (Owner) | 4XXXX – Billable Expenses Income (Revenue) | “Billable Expense: Bathroom Faucet Replaced” | -$240 | Arbitrage: 212 Chantilly Way |
Some rental arbitrage operators need to receive taxes from Vrbo and remit these taxes directly to their local tax authority. In this case, if you’re using Tallybreeze, the Taxes Collected line item found in your presets will take care of collecting these taxes. This means all you would need to do is pay your tax authority what’s owed to them from what has been collected. We’ll go over this here:
The listing, 212 Chantilly Way, is set up on Vrbo to receive custom taxes for all reservations. In Tallybreeze, these amounts are allocated to “24210 – Rental Liability: Vrbo Taxes Payable”. After running a balance sheet report on this listing in QuickBooks, you see that $200 is owed for transient occupancy taxes.
First, you’ll need to send your payment to the tax authority either via bank transfer, ACH, check or other means. Once the transaction is posted and complete, record the outgoing transaction from the Operations Bank Account using the following entry:
| Debit | Credit | Class Category | |
|---|---|---|---|
| 1XXXX – Operations Bank Account (Asset) | $200 | Arbitrage: 212 Chantilly Way | |
| 24210 – Rental Liability: Vrbo Taxes Payable | $200 | Arbitrage: 212 Chantilly Way |
Detailed instructions for QuickBooks Online
1. Check how much exists in the Custom Taxes Payable account for the owner
The amount that needs to be paid to the tax authority can be found in the balance sheet. Filtering the balance sheet by the class for each listing, look up the total amount under “24210 – Rental Liability: Vrbo Taxes Payable”.
2. Create Bill
| Vendor | Category | Description | Class |
|---|---|---|---|
| Tax Authority | 24210 – Rental Liability: Vrbo Taxes Payable | “Taxes Paid: 11% City TOT” | Arbitrage: 212 Chantilly Way |
3. Transfer the amount from your operations bank account to the tax authority
Send the money via bank transfer, ACH, check or other means.
4. Reconcile operations bank account statement line amount with bill
Reconcile the bill with the bank feed in QuickBooks
Using Tallybreeze, Vrbo reservation data is automatically processed in QuickBooks without a hitch. Once your expenses are recorded in QuickBooks, you can produce beautiful monthly reports with ease and can observe the performance of each listing without any hassle at all.
This report is for those who want to compare how their Vrbo listings are performing against each other. It can be found under the QuickBooks left menu label “Reports”. From there, look for “Profit and Loss by Class”. The profitability of each listing for your rental arbitrage operations can be viewed in this report – the most profitable listings will be clear.
Rental arbitrage on Vrbo can be a highly profitable business model, offering strong return potential with relatively modest upfront investment—while still allowing you to maintain full control over your accommodation brand. However, long-term success hinges on disciplined financial oversight, particularly as you scale, acquire additional properties, or negotiate with current and prospective landlords.
Consistently tracking performance and processing accurate financial data is essential to understanding the true health of your operations. With clear, reliable numbers, you can make informed decisions that maximize profitability and reduce risk.
A streamlined, well-structured accounting system brings transparency to every aspect of your business. We hope this guide has helped clarify the path forward and provides the accounting foundation you need as you build and grow your firm.
Finally, there are other business models that are not covered in this guide but are covered better in the following guides. Be sure to check these out:
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