Investing in Short Term Rentals near Los Angeles

What is a Short Term Rental?

A short term rental, as opposed to a long term rental is a property that’s rented out for less than 30 days at a time. Platforms such as Airbnb and Vrbo have given short term rentals a rise in usage in the past several years. They’re more attractive than hotels for a lot of people as many times they offer more space, amenities, aesthetic, ability to live like a local, and sometimes are a way to save money.

How much do short term rental’s make?

Short term rentals are known for making more than triple traditional long term rent. If you normally charge $1500 a month for monthly rent, you might be able to charge $150/night for the same property. If it’s fully occupied that month, that’s $4500 a month.

What are the costs associated with short term rentals?

Short term rentals have more overhhead costs than traditional rentals, since there’s more people coming in and out. You will have to pay for cleaning between stays, cost of replacing items more often such as linens, consumables such as toilet paper and coffee, insurance, a listing fee, and depending on how hands on you want to be, property management. There’s also higher start up costs as you have to get the right permits, furnish the property, market it, etc. However, even with all of these costs, short term rentals continue to be insanely profitable.

What are the best locations near Los Angeles for short term rentals?

California is known for it’svarious types of destinations so close to one another. It’s realy home to some of the best short term rental markets in the world. Let’s look at a few.

Joshua Tree, California

(and surrounding areas: Yucca Valley, Twentynine Palms, Landers, Morongo Valley)

Average daily rent: $235

Average annual occupancy: 83%

Rental demand: High

Seasonality: Low

Investor score: 89

 

Palm Springs, California

Average daily rent: $446

Average occupancy: 75%

Rental demand: High

Seasonality: Low

Investor score: 100

 

Lake Arrowhead, CA

Average daily rate: $387

Average occupancy: 67%

Rental demand: High

Seasonality: Low

Investor score: 53

 Source: AirDNA

How do I get started investing in short term rentals?

The first step is to do your research. Find what location is the best investment for you. Work with a local real esate agent, preferably someone who has experience with short term rental investments and understands the laws. Once you find a property, you should crunch the numbers to see if it makes financial sense for you. You can hire others for this, or your real estate agent may be able to help, or you can purchase data from Airdna.com.

Once you’ve made your purchase, you have to get Airbnb permits by contacing the city planning department. However, if you’re purchasing in a high tourist area (such as the places I listed above), there’s a good chance the home may already be permitted.

Once your property is permitted, you can get it ready to be listed. Standing out is everything, and you want to keep up with the top producing rentals in the same area. Check out those listings to see what may be important for yours. Furnish your airbnb and provide amenities that you think will be appreciated by guests in the area. Then, you should hire a professional photographer to come take photos of your property. If you choose to hire a property management company, these typically will coordinate all of the steps.

Now your property is rental ready and able to start booking up!

blue wooden door near green plants during daytimewhite and brown wooden bed frame with white bed linentriangle house with trees on sides

If you’re interested in starting your short term rental venture don’t hesitate to reach out with any questions!