Last updated on June 21st, 2023
airbnb property investment south lake tahoe
Owning a property with a mesmerizing view of the mountains is a dream for the majority of people. If you are eager to make this come true by earning a passive income at the same time, then purchasing a property with a beautiful view of the mountains is ideal in South Lake Tahoe, California.
Airbnb rental arbitrage in California is preferred by investors who have a limited budget to purchase a property, which means you can do Airbnb by just renting it! However, the main question is: will Airbnb properties be profitable in that area?
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“Lake Tahoe is a good real estate investment for those who want consistent and predictable vacation rental demand. The area sees two strong peak seasons — summer and winter — thanks to enjoyable lake and ski weather.
This translates to solid annual occupancy and income generation, with some owners even being completely booked (or close to it) in the summer high season.”– Evolve on South Lake Tahoe Property Investment
Let’s not get carried away by a property’s design or its proximity to major tourist areas because the primary step is to determine profitability. In this article, we’ll discuss the metrics in order to gauge the best property investment, specifically when buying a beachfront property in South Lake Tahoe.
This includes the best website recommendations for property investment, the prices and properties for sale in South Lake Tahoe, along with each property type’s gross rental yield, cash-on-cash return, and annual revenue.
Pros of Buying An Airbnb in South Lake Tahoe
Leaving behind the fact that South Lake Tahoe is a charming place surrounded by breathtaking natural beauty, there’s more to learn as to why we recommend purchasing a property in this city. Here are some of the major reasons why you should consider buying a property for Airbnb in South Lake Tahoe:
1. Low tax rates
One of the advantages that you will enjoy when investing in South Lake Tahoe is the low tax rate! Moreover, there are no income state taxes in California and the average effective property tax rate in El Dorado County is just 0.87%, which is lower than the national average of 0.99%.
2. Plenty of outdoor activities and good touristic demand
South Lake Tahoe offers a variety of exciting outdoor activities for visitors and locals alike. In fact, if you’re the adventurous type, you will love this city because there are plenty of options to do in its natural surroundings. Thanks to this, the Lake Tahoe area became a popular tourist destination that attracts around 15M visitors per year.
Cons of Buying An Airbnb in South Lake Tahoe
Now that we know the pros of investing in South Lake Tahoe, let’s take a quick look at some of the cons. It’s always better to look at the two sides of each coin in order to properly set your expectations!
1. High Cost of Living
While South Lake Tahoe’s cost of living is cheaper compared to other cities in the state when it comes to comparing it with the national average, it’s 18% more expensive and housing prices are 84% higher. Currently, the average housing price in South Lake Tahoe is at $643K based on Zillow Index.
2. Be prepared for the snow season
During the winter season, South Lake Tahoe experiences heavy snow which can lead to leads to difficult road conditions, making it hard to travel around. Yet, the good side is that the city does a great job of plowing the roads!
airbnb property investment south lake tahoe
Is Property Investment Profitable in South Lake Tahoe?
Using a short-term rental income calculator, it was discovered that a 2-bedroom apartment in South Lake Tahoe can generate an annual revenue of $49,091 with a steady occupancy rate of 61% and a nightly rate of $207.
airbnb property investment south lake tahoe
New Houses for Sale in South Lake Tahoe
Buying an investment property in South Lake Tahoe will not only let you have access to a delightful vacation spot, but it can also bring an excellent return on investment and become a reliable income stream! It may be difficult to find the best properties that have the potential to produce high yields and capital growth, and this article will certainly help you through!
Here are some of the profitable properties in South Tahoe for sale along with the calculated gross rental yield, cash-on-cash return, and annual revenue.
861 Emerald Bay Rd Unit 22, South Lake Tahoe, CA 96150
1. Studio-type Property for Sale South Lake Tahoe Mountain Properties
- 0.4 miles to Tahoe Valley Elementary School
- Asking Price: $79,990
| GROSS RENTAL YIELD | 29.23% |
| ANNUAL REVENUE | $23,378 |
| CASH ON CASH RETURN | 61.91% |
36 Milestone Rd Unit 6, Kyburz, CA 95720
2. 1-Bedroom Type Property for Sale South Lake Tahoe Mountain Properties
- 4.8 miles Silver Fork Elementary School
- Asking Price: $149,000
| GROSS RENTAL YIELD | 17.51% |
| ANNUAL REVENUE | $26,085 |
| CASH ON CASH RETURN | 26.75% |
3740 Blackwood Rd Apt 57, South Lake Tahoe, CA 96150
3. 2-Bedroom Type Property for Sale South Lake Tahoe Mountain Properties
- 0.2 miles to Bijou Community School
- Asking Price: $144,990
| GROSS RENTAL YIELD | 29.38% |
| ANNUAL REVENUE | $42,596 |
| CASH ON CASH RETURN | 62.37% |
080 Julie Ln Spc 139, South Lake Tahoe, CA 96150
4. 3-Bedroom Type Property for Sale South Lake Tahoe Mountain Properties
- 0.4 miles South Tahoe High School
- Asking Price: $199,000
| GROSS RENTAL YIELD | 24.63% |
| ANNUAL REVENUE | $49,006 |
| CASH ON CASH RETURN | 48.11% |
3740 Blackwood Rd #41, South Lake Tahoe, CA 96150
5. 4-Bedroom Type Property for Sale South Lake Tahoe
- 1.0 miles to Bijou Community School
Asking Price: $205,000
| GROSS RENTAL YIELD | 10.26% |
| ANNUAL REVENUE | $131,920 |
| CASH ON CASH RETURN | 5.00% |
Summary
Conducting market research in South Lake Tahoe is helpful for accuracy and knowing the potential profitability. With the number of visitors that it attracts annually with its outdoor activities and natural surroundings, this city can certainly generate a nice cash flow for property investors. But, it’s not recommended for property investors with a limited budget as the average property price is 18% higher than the national average. There are certainly other cities in California that one can discover!
As long as the potential revenue is calculated using an Airbnb income estimator, it’s definitely worth the time & effort to invest and speak with a short-term rental expert to make the wisest decision for property investment that you won’t regret.
