Real Estate Agent · Los Angeles CA + Lake Tahoe, NV and CA · Member since 2021 · 180 posts · 158 votes
4y
Yes there are better cap rates than that in Socal. I could send you many that would work if you have realistic ideas on price and an open mind. I've seen north of 30% COC returns on STR's very recently. Socal is a big area. For regulation reasons you need to pick your county wisely.
Walnut Creek, CA · Member since 2020 · 285 posts · 318 votes
4y
@Ari Dehbone here are the areas in SoCal that allow for Non-Owner Occupied short-term rentals (NOO STRs for short):
Palm Springs: 36 total stays/yr
Fullerton (near Disney Land)
Laguna Beach (non-residential zones)
Huntington Beach (Sunset Beach area as long as you apply before 3/1/22)
Santa Barbara: Inland (NOO in commercial zones and STR-Coastal Zone Historic Overlay Zone), Coastal (NOO unregulated, but court ruling allows for it)
Joshua Tree
Malibu
Big Bear Lake (92315 zip code)
Newport Beach (R-1.5, R-2 or RM Zones)
You'll have to do your research on specific properties for cap rates and cash flow, but these are the areas I would look in. STRs can be extremely profitable if done right, so feel free to DM me if you have any questions. Good luck!