My head is spinning! STR in SoCal?

[Maureen Monfore]

I need help. We are getting ready to list a long-term rental home out of state and do a 1031 exchange for a STR property (maybe two) closer to where we live in SoCal. Given the income potential, we think STRs are the way to go. The only question is WHERE?! We'd like to be within a few hours' drive from Ventura County. Here's our list:

- Joshua Tree/Yucca Valley - Affordable but oversaturated

- Anywhere in LA - Not allowed. But maybe there are spots I'm missing?

- Hot spots in Orange County - Not allowed. But maybe there are spots I'm missing?

- Anywhere in Santa Barbara County (including wine country) - Not allowed. Anywhere north of there is Carmel and Monterey which are probably not allowed and way outside our budget.

- Palm Springs - Most areas are not allowed. Others seem to be on the brink of outlawing them.

- Tahoe - Might be my favorite place to visit in the summer (outside of Maui), but South Lake Tahoe (CA) is not allowed. Incline Village in NV are allowed but they're outside our budget.

- Big Bear - I've never owned a property that gets snow. And the property I'm selling is constantly wet (near Seattle) and I want to get away from those issues.

- Sedona, AZ - A bit more than we want to drive (8 hours) and the AirDNA numbers are just meh. But it's a place we'd like to visit. We've never been.

- Temecula Wine Country - Wine, hot air balloons, casino, views, only 3 hours away, what's not to like? Again, a place we'd like to visit but have never been. We'd have to be outside city limits with a decent amount of land and those homes are expensive. $1.2m for a fixer.

- Thousand Oaks - This is close to home and has no laws (good and bad). It's a sleepy town after 10pm, but close to home would be a good thing for our first STR. We could afford an 1800sf house in a neighborhood, but what's the draw? It's about an hour from LA, 30 minutes to Malibu, 1.5 hours from Santa Barbara, 2 hours to Disneyland, and 30-45 minutes to Six Flags and Universal Studios. Is that enough??? AirDNA numbers are good at $600/night, but I just read a post here that said AirDNA might not be so reliable.

- Ventura - Semi-nice beach town with a homeless problem near the downtown area. Close to home. City ordinances and price point seem doable.

- Santa Clarita - Close to home and houses are cheaper than here. Close to Six Flags (10 mins), Universal Studios (20 mins) and LA (30-40 mins). Farther from the beach. Is that enough of a draw? Would you rent a house in a neighborhood with nothing particularly spectacular? School buses driving down the street? What makes it special?

- We're open to NV and AZ since they're more friendly to businesses than CA. But where? I think an 8-hour drive is our limit. Laughlin? Havasu? Scottsdale? St. George, UT? And even 8 hours feels like a lot considering we're doing STR for the first time.

Thanks for your patience if you made it this far. My brain is way too scattered for the timeframe we're under. And I realize it all sounds so doomsday. What am I missing? Are there other areas we should consider? Do any of these areas sound good to you?

Thanks for your help!

[Jason Kudo]

Quote from @Maureen Monfore:

I need help. We are getting ready to list a long-term rental home out of state and do a 1031 exchange for a STR property (maybe two) closer to where we live in SoCal. Given the income potential, we think STRs are the way to go. The only question is WHERE?! We'd like to be within a few hours' drive from Ventura County. Here's our list:

- Joshua Tree/Yucca Valley - Affordable but oversaturated

- Anywhere in LA - Not allowed. But maybe there are spots I'm missing?

- Hot spots in Orange County - Not allowed. But maybe there are spots I'm missing?

- Anywhere in Santa Barbara County (including wine country) - Not allowed. Anywhere north of there is Carmel and Monterey which are probably not allowed and way outside our budget.

- Palm Springs - Most areas are not allowed. Others seem to be on the brink of outlawing them.

- Tahoe - Might be my favorite place to visit in the summer (outside of Maui), but South Lake Tahoe (CA) is not allowed. Incline Village in NV are allowed but they're outside our budget.

- Big Bear - I've never owned a property that gets snow. And the property I'm selling is constantly wet (near Seattle) and I want to get away from those issues.

- Sedona, AZ - A bit more than we want to drive (8 hours) and the AirDNA numbers are just meh. But it's a place we'd like to visit. We've never been.

- Temecula Wine Country - Wine, hot air balloons, casino, views, only 3 hours away, what's not to like? Again, a place we'd like to visit but have never been. We'd have to be outside city limits with a decent amount of land and those homes are expensive. $1.2m for a fixer.

- Thousand Oaks - This is close to home and has no laws (good and bad). It's a sleepy town after 10pm, but close to home would be a good thing for our first STR. We could afford an 1800sf house in a neighborhood, but what's the draw? It's about an hour from LA, 30 minutes to Malibu, 1.5 hours from Santa Barbara, 2 hours to Disneyland, and 30-45 minutes to Six Flags and Universal Studios. Is that enough??? AirDNA numbers are good at $600/night, but I just read a post here that said AirDNA might not be so reliable.

- Ventura - Semi-nice beach town with a homeless problem near the downtown area. Close to home. City ordinances and price point seem doable.

- Santa Clarita - Close to home and houses are cheaper than here. Close to Six Flags (10 mins), Universal Studios (20 mins) and LA (30-40 mins). Farther from the beach. Is that enough of a draw? Would you rent a house in a neighborhood with nothing particularly spectacular? School buses driving down the street? What makes it special?

- We're open to NV and AZ since they're more friendly to businesses than CA. But where? I think an 8-hour drive is our limit. Laughlin? Havasu? Scottsdale? St. George, UT? And even 8 hours feels like a lot considering we're doing STR for the first time.

Thanks for your patience if you made it this far. My brain is way too scattered for the timeframe we're under. And I realize it all sounds so doomsday. What am I missing? Are there other areas we should consider? Do any of these areas sound good to you?

Thanks for your help!

 Hi Maureen,

I am a realtor that specializes in working with short-term rental investors and have helped several BiggerPockets members acquire real estate (single-family homes and vacant land) to use as short-term rentals.

It's definitely going to depend on your budget first and foremost.

In the Southern California High Desert (Joshua Tree and neighboring towns), you must refrain from purchasing a property in a residential neighborhood unless the property is uniquely positioned to have no neighbors adjacent and unobstructed views from the backyard otherwise the property must be on acreage. Otherwise, you will be competing with aaall the other STRs in residential neighborhoods and the only way to differentiate yourself at that point is to have a kick-*** in-ground pool/spa. Also, not all properties on acreage are created equal. Although this is the high desert, neighborhoods still do exist and many inexperienced out-of-area agents have no clue and think the desert is the desert.

Los Angeles County is definitely not friendly towards STRs and most cities require the owner to be on-site the entire length of a guest's stay which means you are either renting out a room or a guest house which is not ideal. The only city that I have found that does not have this requirement is my hometown of Long Beach which recently opened up it's regulations to allow un-hosted non-primary residences to be used as short-term rentals. At first, the neighborhoods near the coast were not eligible but the Coastal Commission recently opened up this restriction too. Long Beach has a lot going on for it. It is quickly becoming an aerospace hub. SpaceX, Spinlaunch, Virgin Galactic, Boeing, and RocketLabs have all made a presence in Long Beach. Long Beach has one of the best aquariums, if not the best, on the west coast. It is also a quick drive to Disneyland, Orange County beaches, and Downtown LA. A good majority of the water events will be held at the Long Beach Aquatic Center during the LA28 Olympic games.

In Orange County, all the beach towns are STR unfriendly. Dana Point's Planning Commission approved an STR program on May 9th but the approval was appealed and the City Council is reviewing the appeal on June 21st.

The city of Palm Springs is STR-friendly. Entry price is above $1M for a property that will do well. Most of the neighboring towns are STR-unfriendly. Indio has pockets of STR-friendly HOAs. Look at the Indian Palms HOA community. The unincorporated town of Bermuda Dunes is STR-friendly but most of the HOAs are unfriendly so avoid properties within an HOA.

Big Bear's lake level has been receding year over year and Swim Beach is closed because of this. Since the earth is coming out of an ice-age (climate change) and temperatures are rising, Big Bear's snowfall levels will certainly feel the effects. Having said this, Big Bear is a favorite location for SoCal locals. I would look at Idyllwild as an alternative if wanting a mountain cabin and a location that is not so dependent on snowfall.

I don't know much about the Sedona STR regulations since I work strictly in Southern California but Sedona is beautiful and has a lot of great hiking. Make sure to look up Sedona Energy Vortex!

In Temecula, the property must be in the unincorporated areas of Temecula as STRs are not allowed within the incorporated town limits.

I don't service Thousand Oaks, Ventura, or Santa Clarita so I don't have much to say about them. My parents live in Arroyo Grande and we like to stop in Summerland when we drive up to visit but homes there are pricey. If looking up that way, look at Cambria, Grover Beach, and Arroyo Grande. I don't know about the STR regulations there but those are nice areas.

Feel free to reach out with any questions!