All Forum Posts by: Daksh Raheja

@Daksh Raheja I would recommend going out of state. California is not an investor friendly market. Taxes, tenant laws, and high cost are just a few reasons its better out of state. Happy to point you in the right direction based on your budget, goals, etc. 

To compete in Joshua Tree you need to have a pool, murals, and a designer doing your furnishings. There are easier places to start in the STR game.

 Hi Daksh, realtor and short-term rental owner in the high desert here. I've helped several BP members acquire properties for the purpose of renting out on a short-term basis in the Joshua Tree area.

First thing to know is info on the current regulation landscape. Currently, only areas under San Bernardino County jurisdiction are not bound by a cap on permits. The City of Yucca Valley has implemented a 10% cap in relation to the total available single-family housing stock. Currently they have about 30 or so permits remaining before they reach this cap. After this, you have to wait for a permit to expire and not renew or wait until the housing stock increases which will increase the number of available permits.

The City of 29 Palms has a 500 permit cap and they are already at max capacity so you will have to go on a waiting list in the Town of 29 Palms.

There area areas of Yucca Valley and 29 Palms that are under San Bernardino County jurisdiction. If you need help determining whether a specific property is under City or County jurisdiction, let me know.

All of Joshua Tree is under San Bernardino County jurisdiction and not bound by any cap at the moment. However, it does appear that a cap limit is coming down the pipeline in 2023 or 2024 so waiting too long may work against you.

Now, regarding oversaturation. This isn't strictly a California High Desert phenomenon. You're going to run into this in most of the major STR markets because within the last 2 years we have seen a massive spike in available inventory.

In order to compete with the competition now, hosts/owners/operators need to step up their game and be willing to invest in good quality furniture, memory foam mattresses, high quality linens, professional seasonal photography, etc.

In the high desert, most visitors are looking for peace, quiet, privacy, and amazing scenery so this means stay away from purchasing homes in residential neighborhoods with neighbors on all sides. You want to choose a location that is less densely populated. Many buyers who acquired properties in ill-advised locations right after the pandemic during the STR gold rush, are either struggling now or have sold off already. There is a good chance that after this high season is over, we will see another wave of properties hitting the market from owners who are unable or unwilling to stomach the low season.

I can tell you that my property is doing well. We are booked out through April and May is filling in nicely. We are also starting to get August bookings from the stargazers who come for the meteor showers in August.

The high season in the California High Desert starts in October and ends in mid-May and the low season is mid-may to October.

Feel free to reach out with more specific questions.

I would advise to wait.... see what these areas are doing after 1 years of "slow down" all of the desert areas you mentioned boomed the last 2 years and everyone bought there during the COVID frenzy and are very over saturated. And the numbers you see on Airdna etc are not current numbers- they are averaged from the last 12 months. So wouldn't expect the same returns at all. Esp bc prices to purchase havn't dropped lower bc demand is still up. 

I would advise you to wait for prices to drop, or wait and see what the vacancy #'s are in 8 months from now in these areas specifically bc of the amount of saturation. 

Also, I have a feeling people might not like owning an STR that bought during the BOOM and might be selling in the next year.... might be able to pick up turnkey STRs for a good deal by waiting. That is personally what I am doing right now for all STRs in CA.

Hi Daksh my mom actually bought a single family in Yucca Valley about 10 years ago and lived there for a bit then she rented it out for a few years. She had a little bit of passive income as the rent was not to high and the mortgage was not either. She just did a cash out refi to rehab her house to convert it into an STR. Shes about done now with the rehab and is going to start the process for getting the permits to do run the STR. I'll be happy to give you some updates on the progress once she lists it and starts getting it booked.

@Albert Bui

@Matthew Kwan

 This. I was strongly considering it for a while until this winter rolled around, which would be the high season. Started searching for weekends a month out and there were over 1000+ options. Even when looking at an upcoming weekend there were still 400+. Lots of very nice listings as well with wide open calendars. 

If you are going to invest there, bring your A+ game and buy a property that has something going for it from a nature perspective (nice view, privacy, boulders/cliffs in the backyard, etc). 

Sorry, but while you were analyzing, the best time to buy has 'largely' passed you buy. I say 'largely' because it is always a good time to buy the right property.

So why jump in now? Wait until the market has calmed down and the economy is kinda back to normal. You've already made a mistake by waiting, why compound it by 1) buying in a heavily saturated area with 2) a lot of restrictions, 3) with high interest rates (that will impact your cash flow heavily).....?

Not trying to be a downer, just looking realistically IMHO....