If you are buying a property to short term rent (less than 30 days) via Airbnb, vrbo, etc, have you done your due diligence on the regulatory environment? Have you run the math as to whether or not you can make the numbers work if the city bans, severely limits, or collects such high fees & taxes that it makes it no longer economically feasible?
If you are buying in a condo building, just because the HOA allows STR today, doesn’t mean they won’t vote to change the rules, just like any rule in an HOA. Some of this may be led by insurance carriers restricting what they will insure- some master insurance carriers for HOAs and your insurance carrier may specifically exclude coverage for STR and will not allow it or drop the HOA or you as a policyholder.
Have you spent months looking at STR rental data and long term rental data to see what your competition is if you were to pursue either strategy?
Last year the City of San Diego imposed STR licensing. I have seen more long term rental listings and properties for sale that are also on Airbnb. A telltale sign is the property is being advertised for long term rent fully furnished. I can only surmise that either owners had to sell their other STRs as the City only allows a Host to operate one STR at a time, the math was no longer working, or they did not want to deal with the compliance
I tweet about rentals on Zillow and how I have never seen so many rentals, maybe even in the last decade. While I do not do rentals. nor do property management, I do keep an eye on rents when looking at multi units for investor clients. Many other people who are either renting or that are investors have chimed in with the same conclusion. There have been a large number of units that have come online for rent in the past year
new construction
conversion of STR to LTR
owners of property that bought a new home, but their other property has sub 4% mortgage rates so they decide to hold onto that property and rent it out
While we may be systemically under built, when you have a large amount of inventory come online in a short period of time, that is a lot of inventory to absorb.
Between Park Ave and the 805, north of University, there are roughly 229 rentals advertised on Zillow
I’m also seeing buildings offering free weeks of rent. Why are buildings offering free weeks of rent instead of lowering the monthly ask? They do not want set a lower monthly rent number precedence. In buildings where rent control applies, the monthly rent figure is the basis used in how much landlords can raise rent.
When searching on Airbnb, looking at the rough mapped area there are 373 STR
While Palm Springs, CA is a very different market for many reasons, their real estate market is a cautionary tale to consider.
2 other cities within the County are changing the ability to STR
Oceanside has banned new non-hosted STR’s outside of the coastal zone however they are looking to expand the ban.
Escondido is working on a STR ordinance