All Forum Posts by: Craig Jones

Honestly, I’d skip the 1/1 and go straight for the boutique hotel.  Especially if that’s where you want to end up anyway.

There are a million tired, old small-scale lodging properties in amazing high-demand waterfront locations.  With names like “Murmuring Waters” or “Lakeside Inn.”

Rebrand it, fix it up, put Intragram-ready local decor in all the rooms. Put key code locks on all the doors and turn it into an unstaffed self-service STR / hotel hybrid. If you wanna get really fancy, combine pairs of rooms into bigger units and/or build a detached owner's unit on the property.

Starting with a property that is already established commercial lodging also overcomes so many regulatory and zoning hurdles — present and future.

You would be shocked how well a place like this can do on AirBnB.  I don’t really understand it but people shopping there seem overjoyed to book units at our place — which are really nothing more than cute motel rooms across the street from a gorgeous lake.  They don’t even have kitchenettes.  Lots of bookings from Expedia and Booking.com too.

Quote from @Vilandre Forestt:

Yeah, that's huge! South Lake Tahoe has been a battleground for STR (short-term rental) regulations for years, and this ruling could shake things up even beyond Tahoe. The dormant commerce clause argument makes sense—favoring local owners over non-locals can be seen as discriminatory against out-of-state property owners.

I imagine the city will try to come up with new STR restrictions that comply with the ruling while still keeping things in check. But in the meantime, lawsuits are definitely coming from people who lost rental income. Could also open the door for similar legal challenges in other cities with strict STR bans.

Are locals mostly celebrating this, or is there pushback?

At one time "locals" might have been mostly service industry employees. But that's a shrinking group who largely commute in from Reno now because it's gotten too expensive to live up at the lake.  They blame rising rents on LTRs converted to STRs, which was the genesis of the voter initiative to ban STRs in South Lake Tahoe.  But I think it has more to do with the nationwide run-up in housing costs and Bay Area tech wealth consuming Tahoe housing inventory as 2nd homes.

"Locals" now are just as likely to be small biz owners who have a visceral connection to more visitors = more revenue.  Boutiques, galleries, coffee shops, ski & bike rental shop, natural grocery, the employee-owned Ace Hardware -- you name it.

Quote from @Josh St Laurent:

I live in Stateline on the NV side and I can say the ban didn't do much for LTRs like they hoped it would. Like a few others said, there is a lot of vacant housing or people trying to rent furnished homes that were setup for STR. It'll be interesting to see how it all plays out. Tahoe revenue comes nearly all from tourism and I can't imagine a scenario where supply exceeds demand. The parking lot at heavenly near my house usually is full and turning people away by 8:45 AM every weekend.

It's hard to calculate exact numbers, but Tahoe gets 10 - 20 million visitors a year. If it was a national park, it would likely outrank Great Smoky Mountains for the #1 spot. There are surprisingly few hotels, and STR supply is limited by hard caps on the number of permits in every jurisdiction except Washoe County.

So I'm with Josh.  I think the market could absorb quite a few more STRs without making a dent in rates or occupancy.  Especially larger properties.

It'll be interesting to see what happens. The original ban was a voter-sponsored initiative and it barely passed.  Ostensibly it was about protecting LTR inventory for locals, but I don't think it accomplished that.  I'm pretty sure most of the inventory that was STR before the ban just reverted to 2nd homes that are empty most of the time, or ski leases / summer monthly rentals which have been popular for decades. 

I don't think the city government was particularly in favor of it.  They recognized that the local economy is almost 100% tourism based.  And any gains for locals in terms of LTR inventory / rents would be offset by less money coming into town, fewer jobs, etc. 

This is big news in my neck of the woods. STRs have been mostly banned in the City of South Lake Tahoe since a voter initiative passed in 2018. It created a carve-out though for locals to STR their primary residence up to 30 days per year.

The court found that favoring local owners over non-locals violated the dormant commerce clause and they invalidated the whole measure.

Lawsuits against the city expected soon over lost STR revenue.

Running an inn or boarding house that’s also your residence is a centuries old business model that still works great in 2025. Speaking from personal experience.

Fine to say it’s not your personal cup of tea, but no need to scare people off with talk of serial killers.

Quote from @Cliff Benner:

How did you find this? Was it on the MLS?

Yes. It was originally listed as a bed & breakfast (on the residential MLS). And later relisted as a "family compound" with most of the photos showing commercial aspects of the property removed. Several price reductions. It had been listed almost a year when we made an offer.

Quote from @Dave Wacholtz:

Tom,

 Try PersonalUmbrella.com   

We've used them in my agency and the premiums are generally good here in Wisconsin.

Good luck,

Dave 

Here's another vote for PersonalUmbrella.com.  The Markel policies they write are very flexible.  I have a personal umbrella from them that extends not only my personal home & auto liability, but also the liability coverage on my commercial STR policy.  No other umbrella carrier was willing to do that -- they all said I had to get a separate commercial umbrella for the STR if the primary coverage was commercial.

Quote from @John Underwood:

This house is only worth what comparable sales say it is worth.

This is how it will be appraised. Potential or actual STR revenue has no bearing on what it's worth.

There's surely an indirect effect though.  Investors will buy up all the inventory in any market that has STR cash flow opportunity, and comps will rise accordingly.  

I have heard of Kin and I believe their structure is pretty funky in terms of how they are capitalized. Very different from a typical insurance company. I don't know anything about their policyholder experience.

However, every homeowners policy I've ever seen, even with a "home sharing" endorsement or rider, requires some owner use of the property. You may get away with using that kind of policy for a full-time investment STR. Until you don't -- like when you have a big claim and it's denied for violation of the policy terms.

You're essentially operating a 1-unit hotel and you really, really want a commercial policy for it.  The liability coverage is way better, the building coverage is often better, and commercial policies typically cover loss of business income as well, which a homeowners policy isn't going to help you with.

California + wildfire area + STR is super tough. But here are a couple companies that might be able to do it, with a commercial policy:

NREIG
Berkshire Hathaway Homestate Companies

For the latter, you'll have to find an independent agent who's appointed with them.