Any input on vacation rental Investment in Truckee?

Question

Currently looking into buying a 4bed/3bath SFH in Truckee (preferably in Tahoe Donner) and use it as a short term vacation rental. I hear that STR laws are better than South Lake Tahoe (city or El Dorado County) and if all goes well I might get a small profit. Any inputs?

Matt Fine · Answer

Hi Shan,  I'm a remodeling contractor in Tahoe City and we do a lot of work in Tahoe Donner as well.  In the past we owned a condo along Northwoods (2/2 with a garage).  We rented that as a long term rental and had positive cash flow.  Neighboring units were also 2/2s and some did STRs.  The best times are around any holiday.  Summer in TD can be just as lucrative as winter.  The Tahoe Donner amenities are great.  If you are able to find a place near the Trout Creek Rec center, that can be a bonus for yourself and any potential renters.  Additionally, TD has a marina on Donner Lake that sees a ton of use in the summer.  TD also runs great summer camps for kids, so any renters can sign up for the week, drop their kids off and have the day to play themselves.  There is a bit of a divide on the feelings around here with STRs, as many long term rentals are being converted to STRs and the area is loosing some workforce housing.  I know Truckee and TD recently added or changed some local ordinances and rules.  It's bound to be on their website, or just call TD Member services.

The codes around ADUs are changing, so maybe you can find a house with a detached garage and build up an ADU above or below it.  Then you could have a short term rental along with a $1,200 long term rental.  There are a number of those around.

As for other locations- Squaw/Alpine, Northstar, or Tahoe City.  All worth a look.

Do note that the current costs to build a new house in the area, if designed well, can be lower than buying an existing house (especially if you need to remodel it).  I am seeing a lot of crappy houses selling for well over $400/sf.  Then going right into a $400/sf remodel.

Also recognize that the types of renters in South LT are going to be different than the renters in Truckee, North LT.  While this is a total generalization, South LT renters will usually be visiting the casinos and enjoying the nightlife.  There is barely anything to do in North LT or Truckee after 9.  So these areas seem to get more people that ski, bike& hike all day- head out to dinner then come back to rest up for the next day.

Lindsay Buchanan · Answer

Hi @Andrew DeLorenzo. Below is the new proposal for STRs in Truckee. As of right now, they are not issuing any new permits. And the proposed plan below will start the middle of June.

Cap STR registration certificates town-wide at the 1255.

Phase out STRs in both multi-family units and Accessory Dwelling Units. This means that no new registration certificates will be issued for these types of units

One year waiting period after a property sells before it is eligible to register as an STR.

Increase penalties for violations. Add new fee for inspections following a citation.

Establish a December 31 deadline for annual permit renewal to facilitate management of the waitlist.

Conduct a review of the STR program in summer 2023 and bi-annually after that.

Develop incentive program guidelines for a new STR registration certificate-based Workforce Housing Advancement Program to incentivize new workforce housing.

I am a realtor in the area and know what's going on real time. Let me know if you have any additional followup questions or want to jump on a call.

Matt Fine · Answer

Hey Saj- Your idea of a small condo in the KB area is a good one!  Kings Beach is really turning things around.  It sure used to be the ghetto of the lake, but there has been major redevelopment in the area and it's become a great location.  I have remodeled in many different condo associations around Kings Beach and Tahoe Vista and there are some real gems.  Rentals fill up quick too.  Many of the KB locations have the same repeat renters every year.  Definitely worth keeping your eye on it.

Luke Carl · Answer

@Shan Dey.

“If all goes well we might get a small profit”

No thanks

I’m in this business to cash flow the dough dough

Lindsay Buchanan · Answer

@Andrew DeLorenzo I have not seen anything yet. When I see more information, I will be sure to pass it along!

Jon Crosby · Answer

@Shan Dey Tahoe Donner does well in the Summer as well due to all the amenities the HOA offers.  I will say this, North Lake and TD do not generate the revenue that South Lake does however (similar occupancy rates but lower ADRs).  But, North Lake and TD also generate a lot less headaches because there are less bachelor parties and 'casino visitors' using the properties.  North Lake and TD are much more family oriented (in my experience at least).

Best of luck!

Andrew DeLorenzo · Answer

@Lindsay Buchanan, I've got whiplash from the speed of that response, very helpful.

Sounds like AHJ is closing the door on STRs and opening a window to incentivize investors to come up with a solution to the workforce housing problem. Has there been any elaboration on the incentive program?

Andrew DeLorenzo · Answer

Any updates here? I've been shopping the area here and there after visiting a year ago, I know that South Lake Tahoe has banned STR.

Account Closed · Answer

Loving this thread, and thanks for the advice. I’ve been taking my daughter to King’s Beach and/or Incline Village the last few winters whenever there’s a nice snow storm. I’ve considered buying a small condo in King’s Beach but never thought to look in Truckee.

Shan Dey · Answer

Thanks Jon!

Any input on vacation rental Investment in Truckee?

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