Buyer Beware

Real Estate Agent with RE/MAX Desert Properties BRE# 01342880

In a resort market like Palm Springs, California Vacation Rentals are a big issue and driver of home sales.  The Season - from Mid November to Mid April brings lots of snowbirds from the Pacific Northwest, Midwest, and Canada. Beyond that, With the glorious weather and ease of arrival (we are a 2-hour drive for almost 20 Million people and we have a great Airport) it is easy for Southern Californians to get to the Coachella Valley.

Of course, Desert cities have long been hosts to vacationers.  The 1963 movie Palm Springs Weekend even put it on the silver screen. Personally, when I moved here in 1998 and bought a condo I even rented it out to a few people during the two years I spent transitioning full-time to the Desert.  Back in those days the 2-week and 30-day rentals were the most common rentals but weekly rentals were happening. I even rented a place for a week when I was looking for my Palm Springs property

More recently VRBO and Airbnb and other platforms have made it a phenomenon.   Truthfully, I can say from 2016 many, many real estate sales have been made to people looking to cash in on this hot trend. The cash flow has been great with people earning $50,000 a year and up on most properties that are heavily rented. 2020 and the pandemic seemed to spell bad news for the industry but in a surprising outcome while many Hotels operated at reduced capacity or closed short-term vacation rentals soared.                                       Pool Home       Rancho Mirage Street

So what is there to beware of?  Along with the explosion in popularity has come a host of problems from noise and parking to enforcement policies and procedures for the cities and communities these rentals are in.  Unfortunately, the response from the cities has been a mish-mash of policies, referendums on the ballots, endless licensing policy changes, and advertising enforcement guidelines.  It is nearly impossible to keep up with.  Currently, one city is ending short-term rentals (anything under 30 days in October of this year), another has a ballot measure in the upcoming election, and yet another is proposing limiting rentals to just so many homes per street or neighborhood.

So the caution here is that buying one of these homes does not guarantee that you will be able to continue operating the property as a vacation rental.  Many could still be operated as 30-day rentals, which are more popular here than in other areas of the US, but NOT ALL.  So buyer beware is the rule of the day. Do not rely just on a seller or an agent to give you the parameters of the vacation rental rules. You really must talk with the city you are buying in (many have great web pages explaining the issues) and understand what you are buying in a vacation rental home.

Hopefully, a happy median can be reached where the cities can adopt some uniform policies. Visitors, both short and long-term, are an integral part of the Coachella Valley, and making it harder for them to come is not good business for anyone.

Pool Time

Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Michael, my agent is flying out on Tuesday with college friends to meet in Palm Springs, they are looking forward to it.

Oct 30, 2022 08:08 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Michael great information in your blog to share with us today here in the Rain.  Make it a good one


Oct 30, 2022 11:39 AM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Hello Michael - everything in life has a consequence attached to it.  And unintended consequences are a part of that "package deal" too.   Buyers (and sellers too) - beware and stay "aware".  

Oct 30, 2022 03:04 PM