House hacking combined with Investing in short-term rentals

Are you looking for a new investment opportunity? If so, short-term rentals may be right up your alley. Short-term rentals are properties that are rented out for shorter periods of time, usually no more than 30 days. As a Realtor in Los Angeles I help people purchase their first homes and often recommend short term rentals as just another way to house hack. Currently Los Angeles city allows hosted stays in person's primary residence. Ideal property for that would be a single family home with ADU (conditions apply) or 3-4 units building as long as it's not under rent control. Short term rentals can be lucrative investments, but there are some important factors to consider before taking the plunge. Let's dive into the details.

Types of Short-Term Rentals
The most common type of short-term rental is a vacation rental—a property that is rented out by the day or week to tourists and vacationers. This type of rental is typically managed by services like Airbnb or VRBO and can be a great way to generate income from an otherwise unused asset. But it's not the only option; other types of short-term rentals include corporate housing (rentals used by business travelers), furnished apartments (rentals with furniture), and student housing (rentals close to college campuses). Each type has its own unique set of advantages and disadvantages, so it's important to do your research before investing in any one type.

Location Matters
When it comes to short-term rentals, location matters—a lot. A good location can help you maximize profits while a bad one can result in low occupancy rates and meager returns on investment. Before investing in a property, make sure you do plenty of research into the local market; look at factors like average occupancy rates, average rents, median home prices, and local amenities like restaurants and entertainment venues. You should also factor in competition from other rental properties in the area; if there are too many similar offerings nearby, it could lower your chances of making money off your rental property.

Tax Implications
Before investing in a short-term rental property, make sure you understand the tax implications involved. Depending on where you live, you may have to pay both state and federal taxes on income from your rental property as well as additional charges like sales tax or lodging tax. Additionally, any profits from renting out your property may need to be reported on your annual tax return depending on how much money you make each year—so make sure you consult with an accountant before getting started!


Investing in a short-term rental can be an exciting opportunity with potentially high returns on investment—but it's not without risks. Before taking the plunge into this type of real estate venture, make sure you understand all the different types available and do plenty of research into local markets before investing in any one property. Bigger Pockets has a great airbnb revenue estimator as well as AirDNA is a great resource. Additionally, don't forget to factor in taxes as well as competition from other rental properties when calculating potential returns on investment! With careful planning and research beforehand, however, short-term rentals can be profitable investments for those willing to take them on.