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Short Term Rental vs Long Term Rental in the US

short term rental vs long term rental in the US

Key Takeaways
  • If you’re a traditional landlord in the US looking to increase your income, short-term rentals could be the solution you’re looking for. However, as an Airbnb host, it’s essential to do your part to make your short-term rental profitable. One effective way to do this is by incorporating data analytics into your rental strategy. By analyzing market trends and pricing, you can charge a competitive nightly rate and attract more guests.

Introduction

As a rental property owner in the US, the inevitable 2023 recession has probably caused you to rethink your investment strategy. But don’t worry, we’re here to help guide you through these uncertain times. 

Whether you own short-term or long-term rental properties, this article provides you with valuable insights on how to make sound investment decisions. We believe that economic data should not only be accessible to analysts, but also to property owners. By incorporating easy-to-use data analytics, you can maximize your real estate investments and stay ahead of the game during the upcoming downturn.

Differences between Short Term Rental Vs Long Term Rental

Let’s first distinguish one from the other. As we all know, long-term rentals have been a traditional form of housing. They are offered to tenants who choose to reside on a property for at least 6 months with a binding lease agreement. Property owners decide to collect a higher rent than the mortgage to generate monthly income that remains unchanged regardless of the ever-changing economic circumstance.  

On the other hand, the setup for a short-term rental is renting out a property to visitors or guests for a very short period. It works pretty much like hotels where guests can stay in for only a couple of days. This can viably extend to weeks or even months. Short-term rentals offer a cozy atmosphere as well as significantly cheaper nightly rates compared to hotels. This is why guests keep coming back to short-term rentals. 

Since short-term rentals have become widely used all over the world, rental arbitrage is another popular trend.  It has given a lot of nonproperty owners a steady stream of passive income by simply re-renting a unit and listing it on Airbnb, VRBO, or HomeAway. This is a wise, effective, and legal income-generating hustle. Just imagine having a side income from a property that you do not own. 

Rental Regulations in the United States

Tenant’s Right

Tenants in the United States have certain rights that are protected by law. Landlords should also provide tenants with a written lease agreement that complies with all relevant laws and regulations. This includes clearly stating the leasing period, monthly rental rates, and the names of all tenants. 

One of the most important rights that a tenant has is the right to a habitable dwelling. This means that the landlord is legally obligated to provide a safe and livable space, free from hazards like mold, lead paint, or structural defects. If tenants notice any serious problems with the dwelling, landlords should act immediately right after they are notified. 

Another key tenant’s right is the right to privacy. Landlords cannot enter the property without the tenants’ permission – except in emergency situations or with proper notice. This means that tenants have the right to enjoy their living space without fear of intrusion or harassment.

For more information, check out the state-specific laws from this blog.

Airbnb Regulations

As an Airbnb host, it’s crucial to be aware of the regulations that govern short-term rentals in the United States. Regulations vary by city and state, but some general guidelines can help ensure compliance with local laws. Some cities have imposed restrictions on short-term rentals to protect long-term housing availability. For instance, in New York City, it is illegal to rent out an entire apartment for less than 30 days without the owner being present. Additionally, hosts may be required to pay taxes or fees on their rentals. For example, Chicago mandates hosts to obtain a vacation rental license and pay a 4% hotel accommodation tax. 

Hosts must also be mindful of building and safety codes, as they may need to make upgrades or changes to meet local requirements. Being a responsible and considerate host is equally important. It’s essential to communicate clearly with guests, provide them with accurate property information. Hosts should ensure their safety and comfort during their stay. By staying up-to-date with the regulations in the area, hosts can enjoy a successful and rewarding experience on Airbnb.

Advantages of Long-Term Rentals in The United States:

Below are the advantages of operating a long-term or traditional rental property in the United States:

  • Strong population – With over 334 million residents, the United States is the third most populous country in the world. This fact alone can guarantee landlords a strong market demand for long-term rental properties. In 2022 alone, the US population rose to 0.4% – indicating recovery from the COVID-19 Pandemic.
  • A steady stream of income – You are ensured to have a steady and regular monthly income immune to erratic economic conditions. The average monthly rent in the United States is $1,702.
  • Steady operating costs – You do not need to shell out money upfront for furnishings since the tenants will most likely have their own.
  • Laid-back management – You will have less interaction with your tenants, and you do not need to be hands-on with managing your property. This is risky, however, since damages on the property can get worse if they’re left unattended. 

Advantages of Short-Term Rentals in the United States:

On the other hand, here are perks that short-term rentals can offer to Airbnb hosts in the United States:

  • Strong travel and tourism industry – The tourism sector in the United States produced an economic output of $1.9 trillion, providing employment to 9.5 million Americans and contributing 2.9% to the country’s GDP. The United States is the country where international travelers spend the most, accounting for 14.5% of international travel expenses worldwide.
  • Flexible pricing – You can adjust the nightly rate depending on seasonality or market demand.
  • Experience managing the property – Building connections with people by hosting different guests. If this is not your thing, you can still manage the property remotely via automated management tools.
  • Feel more control over the property –  Since guests only stay in for a limited time, you can easily make changes to your property. Without getting worse, any damages can be repaired in no time and also be covered by Airbnb insurance.

US Rental Markets

To know which setup can yield more returns to property owners, here is a view of various short-term rental cities in the US with their respective average yields from both short-term and long-term rental properties:

1. Los Angeles 
  • Median Rent: $2,995
  • Existing Airbnb listings: 2,543
  • Airbnb annual revenue: $42,474
  • Airbnb occupancy rate: 79%
  • Average daily rate: $142
2. Seattle
  • Median Rent: $2,995
  • Existing Airbnb listings: 4,057
  • Airbnb annual revenue: $47,368
  • Airbnb occupancy rate: 81%
  • Average daily rate: $145
3. Houston
  • Median Rent: $1,800
  • Existing Airbnb listings: 7,591
  • Airbnb annual revenue: $21,399
  • Airbnb occupancy rate: 48%
  • Average daily rate: $111
4. Boston
  • Median Rent: $3,225
  • Existing Airbnb listings: 2,141
  • Airbnb annual revenue: $51,653
  • Airbnb occupancy rate: 77%
  • Average daily rate: $185
5. Detroit
  • Median Rent: $1,200
  • Existing Airbnb listings: 998
  • Airbnb annual revenue: $20,285
  • Airbnb occupancy rate: 44%
  • Average daily rate: $121
6. Portland
  • Median Rent: $1,775
  • Existing Airbnb listings: 3,221
  • Airbnb annual revenue: $36,749
  • Airbnb occupancy rate: 81%
  • Average daily rate: $112
7. New Orleans
  • Median Rent: $1,802
  • Existing Airbnb listings: 5,707
  • Airbnb annual revenue: $46,797
  • Airbnb occupancy rate: 65%
  • Average daily rate: $186
8. Phoenix 
  • Median Rent: $2,100
  • Existing Airbnb listings: 5,560
  • Airbnb annual revenue: $40,585
  • Airbnb occupancy rate: 64%
  • Average daily rate: $158
9. Austin
  • Median Rent: $2,326
  • Existing Airbnb listings: 7,768
  • Airbnb annual revenue: $45,655
  • Airbnb occupancy rate: 65%
  • Average daily rate: $181
10. Richmond
  • Median Rent: $1,499
  • Existing Airbnb listings: 588
  • Airbnb annual revenue: $38,656
  • Airbnb occupancy rate: 76%
  • Average daily rate: $128

Conclusion

As an investor, you want to make the most out of your capital, which can range from hundreds of thousands to millions of dollars. However, real estate investments can be tricky, with limited options for property optimization. That’s why owners of US rental properties should consider strategizing their rental business to ensure financial security, especially in times of economic recession.

Now that you know the difference between short-term vs long-term rental income, Airbnb is the key to having better returns. But to make it work, Airbnb hosts must also do their part. Incorporating data analytics into your strategy can provide valuable insights for setting the right nightly rates. Fortunately, Airbtics offers macro and micro views of rental markets, enabling you to make data-driven decisions and increase your market rent.

Be on Top of Your Airbnb Market &
Make Your Property Investment Recession Ready!

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Airbnb Investment All About Airbnb

Top 10 Best Places to Start Airbnb in Los Angeles: Airbnb Investment in 2023

Best places to Airbnb in Los Angeles

There’s no denying that California is one of the most visited states in the USA. In 2022, a whopping 259.8 million tourist arrivals were recorded by Visit California. It’s even expected to increase in the next few years! 

Cali’s booming economy makes a perfect start for Airbnb property investment. Particularly in Los Angeles where more tourist arrivals are anticipated, rental properties are consistently in high demand. 

So if you’re looking for the best places to Airbnb in Los Angeles, you’re on the right track.

In this article, we’ll feature the Airbnb rules in Los Angeles and LA investment properties. Bonus: We’ll also reveal the best areas for Airbnb business near LA – continue reading to learn more!

Is Airbnb allowed in Los Angeles?

Yes, Airbnb is legal in Los Angeles. Airbnb confirms that hosts are required to register with their local city council and publish their permit number on their listing. Here are some notes that you can take note of to be an Airbnb host in Los Angeles:

  • Home sharing is allowed in Los Angeles if it’s your primary residence. Second homes and vacation rentals (long-term stays) are NOT eligible to apply for home sharing.
  • Listings without a permit number or exemption will be blocked for hosting short-term rentals in Los Angeles.
  • Hosting for more than 120 days per calendar year is allowed, but you will need to apply for extended home-sharing.
  • A notarized written approval from your landlord needs to be submitted for home-sharing applications. This is for hosts who are planning to lease a unit for the sole purpose of Airbnb.

Starting an Airbnb business in LA has several rewards, but there are also risks to consider. The major risk is if you unknowingly violate local laws, you will be fined by the city council. The worse part is if you receive a lawsuit! 

LAist recently discovered that there are several hosts who violate LA’s home-sharing law. And because of this, the city council has fined over $300 million in 2021 due to violations. 

Abiding by local laws and regulations is certainly important. It’s highly recommended to visit your local city hall and go through local government websites to gain more knowledge. If possible, you can also reach out to local real estate agents to inquire about your local regulations for short-term rentals.

Is Airbnb Investment Profitable in LA?

Airbnb investment in LA is certainly profitable as long as you target the right market. 

Airbtics’ discovery tool confirms that the most profitable city in LA is Anaheim. An Airbnb host in this area who operates a 3-bedroom property can expect to earn an annual revenue of $121,133 and a GRY of 14.32%.

Best places to Airbnb in Los Angeles

Why Invest in an Airbnb in Los Angeles?

Los Angeles is not just profitable for Airbnb, but there are also affordable housing options available. With its strong economy and competitive market, property investors can expect a high price appreciation. 

In fact, Norada Real Estate guarantees that LA offers the best long-term real estate investments. Known for its leading business industries for IT, logistics, and healthcare among others – LA also offers plenty of job opportunities.

Real estate investment LA should not be overlooked. If you’re looking forward to earning a passive income while enjoying the iconic buildings and views – then Los Angeles is highly recommended!

Best places to Airbnb in Los Angeles

Top 10 Best Areas to Airbnb nearby Los Angeles

If you’re wondering, “Where to Airbnb in Los Angeles?” – we got the solution for you! Check out the nearby cities in LA that are highly recommended for starting an Airbnb business:

1. Long Beach

It is required to register with your local city council to operate a short-term rental in Long Beach. Located 20 miles from LA City Center (25 mins drive), check out the Airbnb data in Long Beach:

  • Recommended bedroom size: 2 bedrooms
  • Median property price (2 bedrooms): $664,644
  • Airbnb Annual revenue: $71,292
  • Gross Rental Yield: 10.73%
2. Anaheim

Airbnb rules in Anaheim state that a host should rent their units for at least three nights and obtain a short-term rental permit. Anaheim is located 24 miles from LA City Center (28 mins drive). Here is the Airbnb data in Anaheim:

  • Recommended bedroom size: 3 bedrooms
  • Median property price (3 bedrooms): $845,872
  • Airbnb Annual revenue: $121,133
  • Gross Rental Yield: 14.32%
3. Oceanside

Airbnb rules in Oceanside state that you have to apply for an STR permit unless it is a hosted unit or part of a gated HOA with at least 50 units. Oceanside is situated 77 miles from LA City Center (1 hour & 13 mins drive). Discover the Airbnb data in Oceanside:

  • Recommended bedroom size: 3 bedrooms
  • Median property price (3 bedrooms): $806,855
  • Airbnb Annual revenue: $127,203
  • Gross Rental Yield: 15.77%
4. Palm Springs

To be an Airbnb host in Palm Springs, you need to have a vacation rental registration certificate. A Transient Occupancy Tax Permit is also needed before operating your short-term rental. Palm Springs is about 99 miles from LA City Center (1 hour & 44 mins drive). Check out the Airbnb data in Palm Springs:

  • Recommended bedroom size: 1 bedroom
  • Median property price (1 bedroom): $255,564
  • Airbnb Annual revenue: $44,461
  • Gross Rental Yield: 17.47%
5. Bakersfield

Bakersfield does not have any short-term regulations yet – and this is what you can take advantage of. Located 93 miles from LA City Center (1 hour & 52 mins drive), here’s the Airbnb data in Bakersfield:

  • Recommended bedroom size: 1 bedroom
  • Median property price (1 bedroom): $156,317
  • Airbnb Annual revenue: $24,629
  • Gross Rental Yield: 15.76%
6. Yucca Valley

To operate a short-term rental in Yucca Valley, an Airbnb host should secure a permit from the local city hall. It is 104 miles from LA City Center (1 hour & 54 mins drive). Check out the Airbnb data in Yucca Valley:

  • Recommended bedroom size: 2 bedrooms
  • Median property price (2 bedrooms): $315,220
  • Airbnb Annual revenue: $70,701
  • Gross Rental Yield: 22.43%
7. Indio

The City of Indio requires all Airbnb hosts to register and STRs are only allowed in residential single or multi-family zones. Located about 117 miles from LA City Center (2 hours drive), here is the Airbnb data in Indio:

  • Recommended bedroom size: 5 bedrooms
  • Median property price (5 bedrooms): $638,368
  • Airbnb Annual revenue: $200,213
  • Gross Rental Yield: 31.36%
8. Tulare

To be an Airbnb host in Tulare, one must get a short-term residential rental special use permit. Tulare is situated 154 miles from LA City Center (2 hours & 46 mins drive). Discover the Airbnb data in Tulare:

  • Recommended bedroom size: 1 bedroom
  • Median property price (1 bedroom): $188,435
  • Airbnb Annual revenue: $42,319
  • Gross Rental Yield: 22.46%
9. Henderson

Henderson can be a long drive from LA, but it also offers a promising gross rental yield! Registering your STR is a primary step before hosting an Airbnb in Henderson. It is about 226 miles from LA City Center (4 hours drive). Check out the Airbnb data in Henderson:

  • Recommended bedroom size: 4 bedrooms
  • Median property price (4 bedrooms): $573,128
  • Airbnb Annual revenue: $95,308
  • Gross Rental Yield: 16.63%
10. Monterey

To date, there are no limits for hosting a short-term rental in Monterey. Located about 230 miles from LA City Center (5 hours drive), here’s what you can expect for hosting an Airbnb in Monterey:

  • Recommended bedroom size: 3 bedrooms
  • Median property price (3 bedrooms): $1,257,363
  • Airbnb Annual revenue: $178,981
  • Gross Rental Yield: 14.23%

Takeaway

Now that you have a clear overview of the best places to Airbnb in Los Angeles, take the next step in your business!

In general, areas within and nearby Los Angeles county offers several promising property investments. If you’re looking to invest in a new city or nearby neighborhoods, it’s advisable to look at other options and compare each market. 

You should also consider investing in a property in close proximity to your primary residence, tourist areas, or your work office for easy management.

Using an Airbnb profit calculator, you can definitely get ahead of your competitors and make the wisest investment decisions. 

Explore The Most Profitable Airbnb Locations Near Los Angeles

Categories
Airbnb Occupancy All About Airbnb

Airbnb Occupancy Rates & Best Neighborhoods in Los Angeles, California

What are the best neighborhoods in Los Angeles & their Airbnb occupancy rates this 2022? Find out more accurate information in this article!

Airbnb Occupancy Rates & Best Neighborhoods in Los Angeles, California

Los angeles occupancy rate california

Airbnb Occupancy Rates & Best Neighborhoods in Los Angeles, California

What are the best neighborhoods in Los Angeles & their Airbnb occupancy rates this 2022? Find out more accurate information in this article!

Let’s talk about one of the most influential cities in the world — the City of Angels!

It is a fact that Los Angeles is home to countless artists, actors, athletes, entrepreneurs in various industries, and famous personalities who are vastly recognized across the globe. Located in Southern California, LA is the second-most populous city in the USA. 

According to World Atlas, LA is one of the top tourist destinations around the world which has about 4.6 million visitors annually! Undoubtedly, this city is a favorite tourist destination because it has a little bit of everything: the famous Hollywood sign, a beautiful view of the ocean, fantastic variations of gastronomy, art museums, theme parks, and so many more!

While other homeowners are considering rental arbitrage in California, knowing the occupancy rates in your preferred location is important. If you’re targeting this particular city in California to invest in an Airbnb but don’t know where to start, this article might just be the perfect guide for you.

Los Angeles City Occupancy Rates & Average Monthly Revenue

WANT TO SEE MORE?

View the free Airbnb occupancy rates data in all the cities of the world!

Los angeles california airbnb occupancy rate

Frequently Asked Questions

Yes! According to the Short-term Rental Ordinance of Los Angeles, certain conditions and requirements have to be strictly followed by STR owners.

For general questions about STR Ordinance, feel free to send a message to LA County's official email address: [email protected]

All property owners engaged in short-term rentals are required to register, collect, and remit the Transient Occupancy Tax (TOT) of 14% to the City of Los Angeles.

Bonus: There are certain exemptions - check out the qualifications for exemptions indicated in this article!

Typically, the months of August to September are the peak seasons in LA with an average of 55% occupancy rate.

As of April 2022, Santa Barbara has the highest occupancy rate of 62% with an average monthly revenue of  $7,256.

According to Airbtics' data, Airbnb hosts in Los Angeles can earn up to $41,436 per year.

Based on our thorough research using Airbtics analytics tool, it shows that Airbnb in LA is certainly profitable! As long as you can find the most ideal location for your Airbnb business and base your strategies on a reliable data analytics tool - you should be on to a good start!

According to Airbtics' data, the highest daily rate among the mentioned neighborhoods in this article is in Malibu - with a median daily rate of $720 and an average monthly revenue of $9,987!

As of April 2022, there is currently a total number of 13,553 listings in Los Angeles, California.

It's a fact that amenities are one of the winning factors for most guests, which is why we also created a separate article discussing why it's important to invest in the Top Airbnb Amenities!

According to a recent article indicating the best Airbnbs in LA, here are some of the must-have amenities that you might want to consider adding:

- Excellent & Reliable Wi-Fi

- Closet & drawer space 

- Full kitchen (+ coffee maker!)

- Bathroom with personal items & toiletries

Bonus: 24% of the overall listings in LA have a pool, too!

I'll save you some time and leave it here -- yes, it's certainly legal! Check out this article and learn more about the definition and methods of Rental Arbitrage in Los Angeles.

Based on the highest monthly revenue of $9,987, Malibu is the most recommended neighborhood in LA. 

The Rent Stabilization Ordinance in LA is a local law that took effect on April 1, 2020. This ordinance refers to limiting rent increases above the allowable limit within a 12-month period. 

For more clarifications on this ordinance, check out the official RSO released by the County of Los Angeles.

In California, a short-term rental refers to an accessory use of a residential property for the purpose of providing temporary lodging for compensation for periods of 30 consecutive days or less.

Learn more about the regulations and requirements of short-term rentals in Los Angeles, CA.

To begin with, let’s try to look at the bigger picture by targeting the Airbnb data for the entire city of Los Angeles. For every case study, we use Airbtics’ data analytics tool to come up with accurate numbers.

The data shown above is based on a 1-bedroom Apartment (Condo) in Los Angeles. It has an average occupancy rate of 46% with a median daily rate of $234 and average monthly revenue of $3,359. If this sounds promising to you, let’s check the top 10 neighborhoods in the city and their respective data!

los angeles occupancy rates

As seen on the column chart above, these are the following occupancy rates & average monthly revenue of the 10 best neighborhoods in Los Angeles. To boost the excitement, we decided to go a little more in detail and added the median daily rates for each neighborhood!

Santa Monica:

  • Occupancy Rate: 53%
  • Median Daily Rate: $218
  • Average Monthly Revenue: $4,154

Malibu:

  • Occupancy Rate: 44%
  • Median Daily Rate: $720
  • Average Monthly Revenue: $9,987

Long Beach:

  • Occupancy Rate: 58%
  • Median Daily Rate: $196
  • Average Monthly Revenue: $3,603

Irvine:

  • Occupancy Rate: 46%
  • Median Daily Rate: $197
  • Average Monthly Revenue: $3,093

Huntington Beach:

  • Occupancy Rate: 56%
  • Median Daily Rate: $207
  • Average Monthly Revenue: $4,241

Big Bear Lake:

  • Occupancy Rate: 35%
  • Median Daily Rate: $230
  • Average Monthly Revenue: $2,538

Hermosa Beach:

  • Occupancy Rate: 42%
  • Median Daily Rate: $315
  • Average Monthly Revenue: $4,439

Brentwood:

  • Occupancy Rate: 41%
  • Median Daily Rate: $191
  • Average Monthly Revenue: $3,126

Santa Barbara:

  • Occupancy Rate: 62%
  • Median Daily Rate: $326
  • Average Monthly Revenue: $7,256

Joshua Tree:

  • Occupancy Rate: 47%
  • Median Daily Rate: $95
  • Average Monthly Revenue: $1,695

Top 10 Best Neighborhoods in Los Angeles

santa monica california occupancy rates
Santa Monica

A beautiful beachfront city located in Western Los Angeles County, Santa Monica is famous for being a walkable & bike-friendly town. According to the City of Santa Monica Tourism, this particular city attracts over 8 million visitors annually!

Some of the favorite scenic spots are the Santa Monica Pier, the Museum of Flying, and the Hippodrome. There are also carnival attractions and talented street performers & tourists can enjoy a handful of exciting activities when they visit Santa Monica. Relatively, this is where business-minded people like you should pitch in strategic ideas to maximize your Airbnb’s profit.

Malibu

“Here I am, next to you, the sky is so blue – in Malibu”, yes, Miley Cyrus was accurately describing just how breathtaking this place is. Located along the Pacific Coast Highway, this city is famous for its landmarks such as Malibu Lagoon State Beach, Point Dume, Malibu Pier, & Zumba Beach.

Although this city is known as the home for Hollywood stars and top athletes, it’s not exclusive for them alone. Numerous tourists are revisiting Malibu annually to explore its wonders and dive into appealing activities such as surfing & wine tasting!

If you were able to check our FAQs section, then you’ll definitely know that this city was rated with the highest median daily rate & monthly revenue amongst all the other neighborhoods in LA. 

Malibu california occupancy rates
Joshua tree california airbnb rates
Joshua Tree

Where two deserts meet — Joshua Tree is located in Joshua Woodlands & Antelope Valley in northeastern LA County. 

Full of wildlife history, this particular neighborhood has nine developed campgrounds within the park. Because the area itself offers a unique LA experience with outdoor activities, they have a record of 2.8 million annual visitors according to National Geographic. Some of the must-see tourist attractions in this area are the Cholla Cactus Garden, Skull Rock, Hidden Valley Nature Trail & Cottonwood Spring Oasis.

During our research, we discovered that the Joshua Tree has the lowest average monthly revenue due to the specific listing that we filtered (1 bed, 1 bath) using our data analytics tool. However, its overall occupancy rate & monthly revenue was surprisingly high in studio-type rooms.

Irvine

Behold, the economic center of Southern California in Orange County — Irvine! With the overwhelming number of tourists visiting this place, the Irvine travel industry has contributed over $49 million in local and state taxes alone in 2019. 

Based on Greater Irvine Chamber, tourists spend the highest amount on accommodations in Irvine.

In this neighborhood, there are also numerous attractions including Irvine Spectrum Center, Tanaka Farms, Disneyland Resort, San Joaquin Wildlife sanctuary & other exciting places that most tourists would definitely love to see.

irvine california airbnb daily rates
brentwood california average daily rate airbnb
Brentwood

If you are particularly targeting travelers with families as your guests, Brentwood is the most recommended neighborhood to invest in. Located at the base of the Santa Monica Mountains, Brentwood has plenty of outdoor recreation opportunities with backyards that offer the best views of LA.

Some of the favorite tourist sights are Old MacDonald’s Farm, Brentwood Cathedral, The Farmers Daughter Produce & Hopefield Animal sanctuary.

In addition, this neighborhood was also marked with a lower crime rate & is safer than 94% of LA neighborhoods.

Hermosa Beach

From the Spanish word itself ‘hermosa’, this ocean frontage is truly beautiful. Located just six miles south of LA International Airport, Hermosa Beach hosts events such as volleyball tournaments and surf festivals which attract visitors annually.

Some of the famous local landmarks are the Vetter Windmill, Roundhouse Aquarium, Les Bacon Ford & Redondo Beach Pier.

According to South Bay Business, the median property value in this neighborhood is rapidly increasing annually and the households have a median annual income of $136,702.

Hermosa beach california airbnb
big bear lake occupancy rate california
Big Bear Lake

The jewel of the San Bernardino National Forest, Big Bear Lake, is located within the heart of Southern California.

Yearly, there is an average number of 3 million visitors in this neighborhood. Remarkable landmarks in this area include Big Bear Alpine Zoo, Butler Peak, Castle Rock Trail, Boulder Bay Park, and Pine Knot Village.

Summer activities such as water sports, mountain climbing, fishing, and other outdoor exercises in Big Bear Lake will make this trip worthy to travel to!

Long Beach

Considered as the 7th largest city in California, visitors of Long Beach can actually generate an estimated amount of $300 million in the overall economic benefit to the city! Tourism is a very important industry – especially in this neighborhood. 

Popular for its waterfront attractions, it is also known for hosting the Grand Prix of Long Beach (IndyCar race) and pride festival & parade. Because of numerous fun events held in this area, business travelers in various industries are also consistently traveling to Long Beach annually. 

Some of the best sights & historical landmarks in Long Beach are El Dorado Nature Center, The Pike Ferris Wheel, Belmont Shore & Downtown Long Beach.

long beach california airbnb occupancy rates
Huntington beach california average occupancy rates
Huntington Beach

Located in Southern California between LA & San Diego, Huntington Beach is also proud to present its breathtaking ocean views and is accessible to 3 airports.

Similarly, this neighborhood attracts a handful of tourists yearly because of surfing competitions, particularly the U.S. Open of Surfing. The Huntington Beach Pier, Old World Village, Hamboards, and Bolsa Chica Ecological Reserve are among the many tourist attractions in this area.

While there are great activities to do in Huntington Beach, it’s also important to take note that its average occupancy rate is at 56% in comparison to other beach areas in Los Angeles.

Santa Barbara

Last but definitely not the least – one of the most glamorous towns in California, Santa Barbara is a year-round tourist destination. While it’s important to know where to go in Santa Barbara, let’s not forget that this is our winner with the highest occupancy rate of 62%!

Surrounded by numerous fascinating landmarks such as Casa del Herrero, Old Mission Santa Barbara, The Courthouse, and Chumash Painted Cave State Historic Park – this neighborhood is definitely worth investing in.

According to Santa Barbara South Coast, this particular neighborhood has about 28,000 visitors daily as it welcomes an average of 7.2 million tourists yearly.

los angeles california best neighborhoods airbnb

Based on our in-depth research in Los Angeles, all of the top 10 neighborhoods are offering various sets of promising views & attractions to help you thrive in your Airbnb business. However, with their respective occupancy rates for 1 bed / 1 bath apartment (condo) types, it is difficult to gauge if the rates are stable according to your preferred listing. To make this less difficult for hosts like you, having an access to an excellent data analytics tool is essential to support your business.

If you will base your assumptions on articles portraying poorly estimated costs or a wild guess, then you will certainly find inaccurate results. Since you already have a broad perspective of occupancy rates for apartment types this 2022, don’t settle!

With the help of our all-in-one analytics service, you can vastly enhance your monthly revenue, create a comparison for each neighborhood, add the appropriate amenities and so many more exciting features. Try Airbtics now and stand out among your competitors!

Explore The Most Profitable Airbnb Locations Near Los Angeles

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Airbnb Rental Arbitrage All About Airbnb

Rental Arbitrage Los Angeles

Rental Arbitrage Los Angeles is a comprehensive guide to give you an idea about the arbitrage concept and get you started with your journey.

Rental Arbitrage Los Angeles

Rental Arbitrage Los Angeles

Rental Arbitrage Los Angeles

Rental Arbitrage Los Angeles is a comprehensive guide to give you an idea about the arbitrage concept and get you started with your journey.

What is Rental Arbitrage?

Rental Arbitrage is a method similar to house hacking, however, the only difference is that you don’t own the house. Instead, you convince a landlord to lease you a property that will be furnished and subleased on Airbnb and VRBO.

Rental Arbitrage is a smart technique to earn money in any type of property including a multifamily house, duplexes, or triplexes. You can easily use the money from your short-term rental to pay off your lease and profit some more. If you own a duplex or triplex then it is pretty straightforward and easy. You can live in one section and rent out the other – which is also known as house hacking. People use this after taking a loan on a property and use the rent to pay off the mortgage. The short-term rental income helps you pay for the long-term lease that you have on the house. This helps you keep the difference at the month-end after paying for the long-term lease.

Assume you are renting a duplex in Los Angeles for $1,800/month. You are living by yourself on one of the sides and you decide to sublease the other on Airbnb. Let’s say you listed it for $100/day and got 80% occupancy. This will bring in approximately $2,600/month in revenue. Not only will it help you pay off your complete rent, but give you a profit of $800. This, in a nutshell, is called Rental Arbitrage.

Find out more about Rental Arbitrage Business and stand out like a pro!

What are the things I need to do before getting started?

How to convince the landlord

Let’s say you want to get into Rental Arbitrage. Now comes the big question, how to find a good property and how to convince the landlord. Later in the blog, we’ll be explaining how to find a good property by doing proper research using Vacation rental analytics. In this section, we will be focusing more on how to convince landlords. As you’ll begin your Rental Arbitrage journey, you’ll come to know that this is the hardest part of the whole process.

You need to be prepared and well researched, good communication skills come in handy here. Also, one thing to always keep in mind: never sublease without informing the landlord, there will be a huge number of people coming in and going out when you’re sub renting, it will not be hard for the landlord to figure out that you are subletting and you might end up getting in trouble.

For convincing, rule number one is always talking about the upsides. If you can rent the property on Airbnb, so can the landlord himself. You need to make a deal with the landlord that is beneficial to them. So they lease the property to you instead of renting it by themselves.

Points to tell an indecisive landlord
  • Doing Rental Arbitrage is a full-time business. It doesn’t generate passive income like long-term leasing. You should try approaching older people who are looking for some sort of passive income. They are more likely to agree to a fixed long-term lease. You can also reach out to full-time working professionals or business owners. They will also be happy with a source of passive income till their property is well maintained. This brings us to our next point.
  • You are more likely to take care of the house than a normal renter. As you are using the property to do business you will take good care of it to make sure you get better reviews. Having a beat-up property isn’t good for business and you are more likely to monitor it often. Not monitoring it will affect your revenue a lot. You may end up paying a huge sum of money for damages done by someone else. So telling this to the landlord might instill some confidence in them.
  • You can ensure timely monthly rent. You can tell the landlord that doing Rental Arbitrage is a full-time business with ups and downs. It doesn’t guarantee fixed income at all like long-term leasing. But if they lease it to you, you’ll make sure to pay the lease no matter what. Either from the money made after rental arbitrage or from your savings. You need to ensure timely monthly lease payments to gain the trust of a landlord.

In conclusion, you need to take care of the property like your own. Make sure to timely pay monthly leases and keep the situation beneficial for both parties.

Ensure the Property and Gain the landlord’s trust

Being on the safe side is always a good idea. From troubling guests to bothering landlords. You need to make sure you are using the right tools to ensure the property is safe and neighbors are happy. Many landlords will have this concern when renting out their property to you. They will be worried about neighbors raising noise complaints. It is a legitimate concern. To help you with all these problems, here are some suggestions that you can implement and have peace of mind.

  • Simply Safe – These are home monitoring tools that you can install in the house to make sure no suspicious activity is happening there. Make sure to let the guests know about them and have their consent.
  • Auto host – Automatically screens problematic tenants.
  • Alexa Guard: If you already own an Alexa, you can use its Alexa guard feature to detect parties. It is an inbuilt feature that monitors changes in sound and sends you an alert in case the guests are having a party and making too much noise.
  • InsuraGuest – This insurance and tech company helps you with risk analysis and gives protection beyond Airbnb and VRBO policies.
  • Vacation Rental Calculator – Give your landlord ease of mind by providing income estimates backed by Airbnb data.

You can integrate the majority of these tools with a PMS of your choice.

Pro’s and Con’srental arbitrage pros and cons

WANT TO SEE  THE AIRBNB OCCUPANCY RATES IN LA?

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What is the initial cost of starting a rental arbitrage in Los Angeles?

You can expect to spend anywhere between $3,000 to $5,000. This cost includes Deposit, Furnishing, Amenities, Legal Paperwork, and LLC Incorporation.

But doesn’t this contradict the Low upfront cost of Rental Arbitrage? Well, these estimates vary from city to city. There is a possibility to do Rental Arbitrage for even less than this depending upon your situation and the type of property you lease.

Still, the amount is lesser than investing in a new property and getting a mortgage of thousands of dollars. In addition to this, you won’t be on the hook for property maintenance expenses and being stuck for years with debt.

But this doesn’t mean Rental Arbitrage can be done with zero or very tight budget. There will be some upfront costs that you have to expect so it’s ideal to own some extra cash is also a good thing to have. This will help pay off the lease during off-season in case bookings don’t happen right away.

Expense 1: Rental Deposits

A rental deposit is going to be one of the first and major expenses. You would need money to be able to sign a long-term lease with the landlord. Therefore, you will need a security deposit, along with your payment for the first and last month’s rent. Sometimes you can negotiate with the landlord and use the first month’s rent as a security deposit.

Expense 2: Furnishing

Most of the time you should always aim to lease a place that is semi-furnished. As someone with a fully furnished home might be doing short-term rentals themselves. Also furnishing a place from scratch can add anywhere from $3,000 to $5,000 to your initial capital.

If the place is semi-furnished, then your best bet is to shop for cheap stuff. You can go and find cheap supplies from places like Home Depot and IKEA. Sometimes even Walmart can have a hidden gem if you look closely.

Expense 3: Photography

Do it yourself! iPhones have good cameras. DIY photography will save you some money.

Expense 4: Cleaning Services

This is included in the starting costs, but you will eventually end up spending on cleaning services. The best way to save money is to do it yourself initially if you have the skills and experience.

If you have no experience or you don’t want to invest time in cleaning a place. Then your best bet will be to hire a professional cleaner. This can cost you anywhere from $50 to $250 depending upon the size and location.

Maintaining a professional relationship with a Real Estate lawyer can be very helpful in the Airbnb business. Airbnb regulations keep updating and you would need some legal guidance on the way to adjust your business accordingly.

They can also come in handy if you face any legal issues with the landlord or guests. They can help in damage claims and insurance as well in case of any mishappening.

Legality and Regulations in Los Angeles

With over 40,000 Airbnb listings, Los Angeles is one of the largest cities in the United States of America and a popular destination for short-term rentals. In 2018, the city’s house-sharing ordinance was updated, and the new legislation went into force on July 1st, 2019. The following is a thorough city guide to Los Angeles’ home-sharing legislation and short-term rental regulations, so anybody may host correctly.

Hosts may lease their short-term rental homes for a total of 120 days each year. Operators can, however, request an exception that will allow them to rent out their houses for longer than the 120-day limit.

In addition, short-term rental hosts must:

  • Enroll with the town and pay the fee
  • View their registered number on ads; and
  • Obtain approval from the city.
  • Check for safety features such as functional smoke detectors, fire extinguishers, and emergency exit information.

Short-term rental sites like Airbnb, HomeAway, and VRBO are also subject to the new ordinance’s restrictions. They are not permitted to handle bookings for rentals that are not listed with the city or have exceeded the yearly rental limit. Such platforms may have to pay $1,000 daily penalty if the regulations are violated. Platforms must also include information on the city’s hosts.

Reference | Keycafe Blog | Avalara.com

Best areas for Rental Arbitrage in Los Angeles

1. Venice

rental arbitrage los angeles venice

According to our Airbtics Dashboard, La Jolla is the top market to start your Rental Arbitrage business. There are more than 1,494 Airbnb listings with 286 private rooms properties and 435 one-bedroom properties. The monthly revenue for most properties is more than $5,597/month with occupancy being more than 64%.

2. Bel Air

rental arbitrage los angeles bel air

According to our Airbtics Dashboard, Bel Air is the second-best market to start your Rental Arbitrage business. There are more than 1,102 Airbnb listings with 255 private rooms properties and 258 one-bedroom properties. The monthly revenue for most properties is more than $5,171/month with occupancy being more than 52%.

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