Short Term Rental In Downtown Sacramento - 1 Bed / 1 Bath

[Hugo Luna]

I am in the process of acquiring a duplex with 1 bed / 1 bath units (approx 750 SF), in the Downtown Sacramento core. I am analyzing creative ways to increase cashflow on the units through short term rentals (airbnb), or furnished units catered to traveling nurses. A non furnished 12 month lease for an updated 1/1 in the area is running $1,400-$1,600 per month, and a furnished unit can push upwards of $2,000 per month. However, furnished units are catered to short term renters. 

I have found that the short term rental permit from the City of Sacramento runs nearly $3,500 per unit, and takes several months to be heard at a public hearing for approval, with the risk of rejection. High risk, but potential for a more lucrative investment.

I've reached out to a couple airbnb hosts in the area to see what they are averaging for monthly income on similar units (1950's build and updated interiors), and the range is $2,000-$2,600. I am curious if anyone on BP is an airbnb host in this area and would be willing to share their experience and stats? 

Although cashflow is tighter here, some reasons why I am pursuing an investment in the Downtown Sacramento core include the following. 

• -I work for a developer in Downtown Sacramento and I am familiar with the future growth of the area. 
• -Appreciating rents in the area suggest increased cashflow over time. 
• -High demand for housing allows for lower vacancy rates. 
• -I have a personal interest in hospitality services and plan to make short term rentals part of my business.
• -Proximity to my current residence. Since I am self managing (potentially a short term), this is important.

If anyone has other creative ways of renting out furnished rentals without the need for a short term permit, please share as well. 

Any and all feedback is appreciated!