(Lake Tahoe vacation property) Questions with short-term rentals.

13 Replies

A friend/ business partner and I have decided to purchase a vacation rental. Our main idea around choosing Lake Tahoe is the year around entertainment attraction. To get down to it, we are asking the Bigger Pockets community for a little first hand advice.

Recommendations for a realtor, property manager, or even a cleaning service in the area.

What are some state requirements that both the Nevada and California side have when it comes to Short-term rentals? Positives and Negatives?

Lastly, any positive or negative advice in an areas when it comes to short term rentals.

I've read previous posts about the topic just looking to engage in my own conversation on the matter. Appreciate your time everyone. Looking forward to interacting.

@Cody Nielsen

It is less of a state issue and more of a city/county issue. Which state you choose obviously has some tax implications and other considerations but most regulations are made at the county level and get more detailed on the city level.

I would look at what you want in an area, such as close proximity to a ski resort and easy access to a lake, then dig in further on the current real estate market and STR regulations to see if you can make it all work together.

@Dustin Allen

Appreciate the advice Dustin. With you being a local realtor in the area what is your opinion about which areas are “hot”. Like I mentioned in the post, ideally I would like to capitalize on both summer and winter seasons. Is there a primed area to do this?

Also would you recommend staying away or going to certain counties in the area

@Cody Nielsen

I focus purely on South Lake Tahoe and El Dorado county. Douglas county is in Nevada and is right across the state line from South Lake Tahoe. I know rules are better there but prices tend to reflect that. Lake Tahoe is surrounded by beaches and ski resorts so winter and summer months are generally busy so long as you’re close to either. South Lake is unique in that it has a mountain very close to most of the town, it has multiple casinos and multiple places/businesses focused on the lake in the summer.

@Cody Nielsen   I have been looking for properties in the Tahoe area also.  I have spoken with Dustin and he is very

knowledgeable.   I have also worked with Bill Dietz at Tahoe luxury properties www.tluxp.com who is more in the North West areas of the Tahoe.  Here is what I have found so far in my research:

-Seems like the California areas are more popular than the Nevada ones for rentals.  Property tax is extremely high on the CA side though, expect to pay about 1.25% of the cost of the property in yearly taxes and it is assessed on the new sale price immediately.  

-Some of the areas I like so far are Kings beach, Incline Village, & Tahoe City.  

-It has been real difficult for me to get the numbers to flow positive unless you are doing 75%-100% cash.  Some others may have different results as I have been looking mostly lakefront but can't get the numbers to work.  Bill also runs a property management company so he can provide some pretty good analysis of income for different areas and properties.   

Feel free to DM me with any questions.


Jeff E.

  

@Jeff E. Hi Jeff, so what is attracting you towards the west and north sides rather than the south or the Nevada side? Any specific pro’s and con’s you’ve come up with?

Are you using the BiggerPockets rental calc? Or do you have your own spreadsheet for cash flow analysis? If your numbers aren’t working out I’d be really interested with talking about why and what your criteria is.

Awesome post!

Hey there @Cody Nielsen -  I am a local realtor in incline Village on the (NV) north shore of Lake Tahoe. While this area is not as popular for tourists as South Lake, it is much more desirable for that reason, and of course more expensive!  While taxes are low, no state income tax for owner-residents, you will pay a premium to own in Nevada on the lake . You should know, however, that much of South Lake has cracked down on short term rentals.  While they are still very popular on the North Shore, many condo associations are prohibiting them as well. and of course with Covid, many owners have been unable to rent due to state/local restrictions, restricted access to the private beaches, etc.  Just be sure to do your due diligence prior to buying. 

@Cody Nielsen Are you planning on using the home yourself? Or is this purely an investment. If the former, pick an area that you love. If the latter, pick an area that will maximize your ROI. Be sure to check county and city guidelines/regulations about what is allowed or not. As @Marian Huish stated South Lake rules have recently changed regarding STRs.  Other locations are talking about changing rules.

Check out several listings and see what amenities different STRs are offering.  You'll want to know what the competition is offering.  Check out home insurance costs and coverage for each specific address before buying.  Insurance carriers have dropped several areas due to them being "high fire" areas.  You could easily spend over $4000/year for insurance!

Happy to provide realtor and management references for the west/north side of Tahoe.

Tahoe is a wonderful outdoors place with tons to do year round.

@Marian Huish Thank you for the beautiful information! My partner and I are each picking a few properties for analysis and having a lunch meeting next week to compare numbers. I’d like to keep this post updated and have everyone check my numbers for accuracy

@Chad Hale 100% an investment, we are based in Las Vegas and I enjoy doing all the labor myself so we were thinking bi-annual trips to the area for enjoyment and rehab if need be. But primary purpose is cash flow and entrance into STR. Our goal is to creat cash flow properties in a few different areas we are personally interested in. With us be based in Las Vegas we are close enough that handle any problems and make frequent trips if needed.

I would also, of course, recommend a 'recon' trip to Lake Tahoe @Chad Hale  to see some properties and get to know the different areas....  and, be warned that once you visit, you'll want to make it your home!  ; D.  

@Cody Nielsen To answer your question about areas of Tahoe I like, the restrictions on STR's in the South Tahoe area (google Measure T Lake Tahoe) and just my personal preference kept me concentrated in the West & North shore areas. When I was analyzing properties, I was looking at historical rental income for the properties since they were already used as STR's and adding in insurance, loan payments, property taxes, maint. etc. These were also single family homes directly on the lake, so you may have very different numbers on properties back from the lake or condos. The CA property taxes are a killer, for example the monthly property tax in CA on a 4M property is around $4,200/month, while in NV a similar priced property could be around 12K for the whole year. With 50% cash down, I was only calculating around 2% CoC ROI on some of the properties I was looking at.

@Cody Nielsen

There are a couple reasons that I prefer the Nevada side for STR. The first being that it's much easier and there are many fewer regulations of STRs on the Nevada side.

On the California side, new STRs are banned in South Lake Tahoe if they're outside a narrow "tourist core" area. 

On the Nevada side, STRs are allowed in virtually all neighborhoods, and permits are relatively easy to obtain (can still obtain new permits during COVID). Property prices are a bit higher than California, but taxes are much lower. Here's the link to more info on STR permits on the Nevada side!

https://www.douglascountynv.gov/cms/One.aspx?portalId=12493103&pageId=16775156

If you're looking for neighborhoods on the Nevada side, I enjoy upper Kingsbury. It's right next to the lifts at Heavenly ski resort which makes it attractive during the winter. It's <10 minutes down the hill to the lake, too. There are some decently priced condos with low HOAs (e.x. in May, I bought a 2 bed/2bath condo for $320K, HOA is $91).

If you're interested in finding a property, I'll be getting my license shortly and would love to help you! I can also help connect you to some great property managers if you're interested.