All Forum Posts by: Sweta Jain

Lot of great replies on here already - only thing that I would add to consider is getting a few outside opinions from realtors, other hosts, property managers, etc. about the medium to long term outlook for STR regulation in your specific area. I manage on Oahu in Hawaii and I would assume based on things that I have heard from other hosts and managers in CA that the conversation around regulation would be somewhat similar given that it is a highly desirable destination for both guests and investors in the STR space.

Speaking only to what I have experience with here - there seem to be three types of zones that vacation rentals fall into - on one hand you have zones where they are illegal, and while it is possible to run and gun in these areas I don't think the risk is worth the reward if you get caught. The second type of zone is one that is loosely regulated (legal now) but where a lot of the conversations regarding STR's are still being had and could change rapidly in the coming years. We advise clients to stay away from these zones on Oahu, or at least make sure they pencil as a long term rental before making any big decisions. The third zone is one that is highly regulated, perhaps taxed at a higher rate, but has an established process for STR's and the risk of changes in the laws regarding airbnb or other OTA's is relatively low, simply because those conversations have already happened and the local government has decided that they are going to allow them in the area and have an established process for permitting, etc. On Oahu the bottom line of buying in this type of zone is that you will pay higher property taxes and fees, but you have a lot more confidence that you'll be able to continue to operate your property as an STR for years to come. I would assume that some version of these three zones exist in OC and it might be worth looking into where yours falls before settling on a STR vs LTR strategy.