All Forum Posts by: Jason Kudo

Hi Thu, self-managed STR owner in the California High Desert and realtor who has helped several clients purchase properties for the purpose of renting on a short-term basis.

General questions pertaining to the overall STR landscape should not incur a cost when directed at a PM/co-host. If a co-host/PM is trying to charge you for questions that you definitely need to ask each potential candidate just to make sure they know what they are doing, RUN. Examples of general questions are local STR regulations, general expense expectations to run an STR, etc., expectations for the owner, etc. Basically questions that the PM/co-host need to be able to answer without having to do any deep-dive analysis.

Property-specific questions such as property improvement advice, revenue potential, etc. that involve deep-dive analysis might justifiably incur an up-front cost depending on the PM/co-hosts business model.

I have a property in the Joshua Tree market and it's doing fantastic.

 Whether buying this subject triplex is a good investment will depend on what your goal is with buying real estate and what your definition of a good investment is. Not all investors share the same goal.

If it's strictly positive cash flow, you're going to have a tough time meeting that goal while living in one of the units these days in Belmont Shore.

Under the current economic decisions, if you're going to live in one of the units, a more realistic goal might be to subsidize your mortgage with the other two incomes to bring your mortgage payment down, build equity, ride the market appreciation, force some appreciation of your own, refinance when rates are in your favor to crush the mortgage payment down, and keep positive cash flow for a long-term goal.

Belmont Shore is a nice area where homes hold their value well and enjoy good appreciation as well as strong rents and in general, the type of renters landlords are looking for.

Belmont Shore is also a good area for short-term rentals and you may want to consider renting one unit as an LTR and the other as an STR.

Ultimately, your situation is going to dictate whether this triplex is a good investment for you and your husband but as a Long Beach resident, I know that Belmont Shore is an area that people aspire to buy a home in.

 Hi Joanna, realtor here that does a lot of business in the Southern California High Desert. 

The reality is that homes appreciated very quickly in the High Desert and we are still, for the most part, in a correction. A lot of buyers in the past couple years purchased with the intent to rent their homes on a short-term basis (Airbnb) which caused prices to shoot up and for one reason or another, a lot of these buyers are deciding to cash out which is creating a large inventory of homes in residential neighborhoods and putting downside pressure on home prices.

We are definitely seeing home prices in residential neighborhoods coming down a lot and with the high level of inventory, there seems to be more room to come down.

Home prices on acreage in the more affluent parts of Joshua Tree and Yucca Valley (south of the 62 Highway) are slower to come down. I think mostly due to unrealistic sellers holding onto the home values of a couple years ago. We are still seeing many of these homes being listed for 100%+ over what they purchased a couple years ago.

As a buyer, the positive is that the good majority of leveraged Airbnb investors have moved on from Joshua Tree leaving mostly cash buyers and if buying now, you should have a lot of leverage to negotiate with since the competition has thinned out.

Mortgage interest rates move with the Fed and the general consensus is that there will be possibly only one rate cut this year in Q3 or Q4 with no more cuts until next year. With lower mortgage interest rates comes increased competition so the sweet spot may be sometime towards the end of this year.

That said, if you see a property you like, the best advise is to shoot your shot and submit an offer that makes sense to you and if they bite, you win and if they don't, you didn't lose.

Idyllwild currently has a pause on issuing STR permits. I would hold off on Idyllwild for now.

Hi Laura, STR owner in the Joshua Tree area and realtor that does a lot of business in the area too. Regarding anti-STR sentiment leading to anti-STR regulation, this is untrue. San Bernardino county has some of friendliest STR regulations in Southern California. There is a small group of locals who are anti-STR but the good majority are pro-STR due the the fact that STRs bring a ton of revenue for local businesses and jobs for locals.

Regarding summers, the temperature is the hottest in August and can get up to 100 degrees so STRs with pools do better in the summer. Palm Springs can get up to 120 degrees so it is cooler than the low desert. However, the Perseid meteor shower hits the Joshua Tree area in August and this brings a lot of stargazers to the area in August because you can see TONS of shooting stars in August.

Regarding saturation, you want to avoid buying a property in a residential neighborhood and opt for something on acreage with good separation from neighbors and ideally south of Highway 62. The greatest saturation is found with STR in residential neighborhoods.

Summertime in Borrego Springs is similar to Joshua Tree in terms of temperatures and you need to be careful about floods in Borrengo Springs as the majority of the town is in a flood zone.  This is why you see most homes in the area surrounded by high walls to protect against flooding. The adobe-style homes with pools in Borrego Springs in acreage do well. Borrego Springs had an incredible super bloom this spring.

The Salton Sea area has an air pollution problem from chemical spraying from nearby farms and the town surrounding the sea is very run down. There is an effort to desalinate the sea but that won’t happen anytime soon. The area is popular for off-roading but these people bring their own RVs. I would avoid for STRs and even mid-term.

Let me know what other questions you have that I can help answer for you in terms of STRs in Southern California!

 As long as you're looking at things in the long-term, screening your tenants thoroughly, staying engaged as the property management, and are diligent about increasing rents the maximum every year, you should be fine. The area between Los Feliz and Silverlake is very trendy and should only become more expensive over time.

It depends. If the STR applicant can demonstrate primary occupancy of the ADU or if the ADU was completed prior to 2017 then the ADU can be used as an STR for 120 days and possibly longer with extended home-sharing approval.

Before jumping into any given business, you need to figure out who your target customer is first. In real estate, the question is: What kind of tenant do you want to attract? This will inform your buying (and rehabbing) decisions. For example, if you want to attract a high-income earner, you can't, in general, buy in a low-income neighborhoods or rehab using low quality materials and finishes. If you want to attract high-income earners who are used to a certain quality of life and can't afford to buy in those areas, then look at your available options; house-hack, partner, buy a condo/townhouse as opposed to a single-family home, start with medium-income earners, etc.

@Brook Bolger, to add to what Peter said, if/when your property is listed for sale, agents inevitably will ask why there is a discrepancy between public records stating your house has 3 bedrooms and also the square footage so you'll need to tell them that it takes some time for public records to be updated.

For the STR portion, when you apply for your permit and state that it's a 4 bedroom (or 5 or whatever including the ADU's bedroom count if including the ADU for guest use), the county may ask you the same question and you'll need to supply the permits and certificate of occupancy.