What You Should Know Before Buying A Property For A Vacation Rental In Palm Springs Area

Dated: 02/23/2018

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Are you considering investing in a vacation rental in the Coachella Valley - Palm Springs area? Thanks to online rental platforms like Airbnb, short-term rental business is getting easier than ever. Some of our clients who purchase 2nd homes here in the desert would like to rent it out to when they are not using it themselves.

Cities in Coachella Valley have passed or will attempt to enforce restrictions on short-term vacation rentals, and if you are a short-term vacation rental Investor, you have to pay attention to what is happening with these rules.

Buying A Vacation Rental In Palm Springs

In January 2018, La Quinta City Council voted to approve a 45-day emergency moratorium that would temporarily prohibit residents from converting non-bedroom space into additional bedrooms - to use as short-term vacation rentals. La Quinta does allow short-term rentals (STRs) but updated and strengthened the STR ordinance in November. The ordinance allows up to two overnight guests per bedroom and no more than nine bedrooms. The ordinance also has rules for daytime guests as well. From 7 a.m. to 10 p.m., STRs that are a studio up to a two-bedroom home are allowed up to eight daytime guests while a home with nine bedrooms can have up to 24 daytime guests.

Palm Springs has the most restrictive set of regulations. New regulations ensure that building owners have to apply for a license to rent out units and either meet each guest on-site or send a property manager to do so. Any given vacation rental can host a maximum of 36 short-term guest stays per year. Fines for violations were substantially increased. Operating a vacation rental without a permit is now punishable by a 5000 fine and permanent ineligibility to ever be issued a short-term rental permit

Indian Wells currently allows about 150 short-term rentals to operate under a 2015 program that is slated to expire at the end of 2018. City staff has urged council members to allow those rentals to stay open because they are generating transient-occupancy tax revenues—about $230,000 in 2016-17—with fewer nuisance complaints.

Rancho Mirage recently tightened its ordinance, excluding rental housing such as apartments. Failing to register a short-term rental property will invoke significant penalties from $1,000 – $5,000. Further, it requires the owner to provide the City a contact number for a “local contact person” designated by the owner to be available 24 hours per day, seven days a week, to respond within 45 minutes to any complaint or call regarding the property. That contact person must be 30 years of age or older.

Palm Desert City Council approved amendments to the existing STR Ordinance on December 14, 2017. This new ordinance prohibits new STRs within the R-1 and R-2 zones. All existing permitted STRs within the R-1 and R-2 zones have until December 31, 2019, to operate. After that date, all STRs will be prohibited within those zones. STRs in zoned PR and R-3 will continue to be allowed.

Effective July 11, 2017, if the vacation rental in Cathedral City continues to operate thereafter without a vacation rental permit, the property owner may be fined up to $5000 each time the unit is rented. Once the permit is issued, "Good Neighbor Brochure" and "Good Neighbor Tips for Vacation Rentals" are required to be posted in the vacation rental.

If you are considering to buy Short-term Vacation Rentals, make sure you are familiar with and understand the ordinance and regulations fully. These regulations are meant to protect the neighborhood, property values - your future investment! And talk to fellow Vacation Rentals Investors or Real Estate Agents - your local experts.

Buying A Vacation Rental In Palm Springs

Short-Term Vacation Rental Information and Ordinance by Cities

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