Living and working in a resort community it is commonplace to have friends and clients tell me of their 
plans to rent out their homes here to seasonal visitors.
Sounds like a good plan and an easy way to make an extra few dollars in the process.
However, like many things in life, it is not quite that simple!
Are you a "Motel" or a vacation residence?
Keep in mind the city collects hefty taxes on nightly room rentals at the local lodging establishments. If you are renting out for less than 30 days (but it could be different in your area) they are going to want to get their share of the rental in lodging taxes.
Of course to even have the privilege of paying those taxes you will need need to file a license and and get a permit. A process that has its' own set of fees.
Don't skip this step. Cities are on the look out for extra sources of revenue and they are checking the vacation rental sites and comparing them to their registered properties, sites such as VRBO and Air BNB are too well known to fly under the radar anymore.
Does the Homeowners association allow it?:
Don't forget that if you are in an association they may have rules governing your ability to rent out the property. Typically these are restrictions about short term - less than a week or two weeks - sometimes even a month is the minimum.
SEE Our Blog Post About Vaction Rentals In Palm Springs
There are New Rules Popping up All The Time:
Recently in our local area the city of Rancho Mirage CA passed an ordinance to require that the person signing the rental agreement must be 30 years old or older! Nearby, Palm Springs has the same restriction but the age is 25.
Noise is always an issue. Vacationing tenants might want to have loud music poolside as they swim or have parties. Existing neighbors, not surprisingly, have an issue with that.
INCOME: Despite these obstacles if you plan carefully, use a reputable agency - selecting tenants carefully - you can profit handsomely from a vacation rental. There are many rentals I know that are earning $50,000 to $75,000 in gross revenue each season. Despite the costs you can certainly make a nice profit and more than enough to keep your vacation rental property taxes, insurance and upkeep going.
Another benefit, checking first of course with your tax professional, is you could have some nice deductions for travel to check on the property!
Just be judicious in how you go about renting the property out and it can be a real winning proposition.
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