Joshua Tree - STR Demand & Permit Processing

[Nicole Hellendoorn]

Any insight into current Joshua Tree STR demand? Has anyone tried medium term rentals in the desert?

[Jason Kudo]

@Nicole Hellendoorn, realtor and STR investor in the Joshua Tree area here. I've helped several clients purchase properties in the high desert (Joshua Tree) and the low desert (Palm Springs, Indio, etc) and helped them get their properties launched on Airbnb.

First, let's get La Quinta out of the way. Do not invest there for an STR. La Quinta is notoriously anti-STR and there is a very small area of La Quinta where STRs are allowed. La Quinta is one step away from banning STRs completely and this next step is most likely coming soon.

Now for Joshua Tree. As far as the permitting process, what you have heard is correct. It takes about 2.5-3 months to get your STR. There is a staff of one that is processing the STR permits for the entire San Bernardino County. That said, in San Bernardino County, if the property already has an active STR and the property changes ownership, although the new owner must reapply for the STR permit, the new owner may continue to operate the property as an STR while waiting for the permit to get processed and issued as long as the new owner submits the application within 30 days of ownership transfer.

As far as demand, there is still demand in the high desert. My clients and I have good occupancy rates but my clients intentionally purchased properties in areas where there is good separation from neighbors to give guests that sense of peace, quiet, and privacy. I would advise against purchasing a property in a residential neighborhood with neighbors on all sides. In short, look for properties that have unique features that money cannot buy; tucked into the hills, lots of land, unique land formations, scenic views (not just the ordinary desert view, we're talking real scenic jaw dropping views), etc.

One thing to know about demand is that 30% of all active STRS on Airbnb came online within the last 2 years so although the number of bookings is up year over year, those bookings are being spread out amongst more properties which is bringing occupancy rates down.

That said, many STR owners purchased at the height of this last STR bull-run hoping to cash in on the craze and are now struggling because they ran numbers using outlier pandemic year statistics. The market is starting to come back down to earth and normalizing and investors need to be much more intentional with their purchases. After this high season is over, I have a feeling that there is going to possibly be a wave of STR owners selling their properties because they don't have the stomach for the slow season or are simply financially unable to push through it.

Regarding medium term rentals, in the high desert there isn't too much demand for them and is more of a low desert thing.