Rental Arbitrage in LA

[Johnny Hastings]

Hi all,

I've been diving deeper and deeper into the rental arbitrage investment strategy. I constantly come across the permitting process needed in most cities in LA. I currently reside in Venice, CA, and work in the San Fernando Valley. I am looking to find an apartment/house that I can self-manage around the area but I am running into the permitting issue. I am not sure how long this process could take me and I am nervous to sign a lease if I can't Airbnb the property immediately. Does anyone have any recommendations for cities around LA that don't require a permit? Any advice from a long-term STR/Rental Arbitrage investor?

Thanks!

[Allen Duan]

There’s a lot to be said about rental arbitrage on the forums already. But I’ll say a little about Los Angeles specifically. We started a rental arbitrage business in 2018 but have shifted to primarily property management of mid term rentals since. We did this for 2 specific reasons.

1. There are very few cities that allow short term rentals in LA and the OC. The few that are, may be moving toward banning or limiting them soon. 

2. Like others have stated above, unless there’s some benefit to the owner, arbitrage doesn’t make much sense to an owner. By managing furnished properties, we are able to provide a valuable service to an owner who wants to be hands off, while also helping them earn more rental income than they would renting out long term unfurnished.

Happy to chat and share more. Just send me a message :)