Should I STR or medium term lease my Truckee / Tahoe-Donner home

Question

Hi--

After a couple years of listening to the podcast and reading through the Biggerpockets website, I'm so excited to have a reason to post. :)

This spring, I was able to purchase my dream mountain home in the Tahoe-Donner neighborhood of Truckee, CA. It's a very well maintained 3bd/3b home that was lived in year round by the previous owners, so it's much hardier than many of the vacation homes in the neighborhood. It also has a unique layout compared to your typical "cabin" in the area (ie. it has multiple public rooms and very large bedrooms vs. one great room and bedrooms barely able to hold a queen bed and a dresser). It's also 25% larger than nearby 3/3 homes. Even though I won't be able to move in until next summer, these characteristics (as well as a very good deal from a motivated seller) made the home too good to pass up.

The question now is do I STR the home, try to find a Sept - June lease, or do a ski lease (Dec-May)? I feel very confident understanding running it as an STR, and had been intending to do so with whatever Truckee home I bought. The COVID situation, however, has many families looking for homes in Truckee / Tahoe for the school year. I see a real opportunity with the home's layout being more conducive to a full time family. There is TONS of demand for homes available from Sept/Oct to June.

Are there aspects of doing a medium term lease that I might be overlooking given that I've been looking at doing STR for so long? Does anyone have a sample medium term lease for Truckee/Tahoe (CA side) that I could read for greater understanding of the tenant/ landlord relationship? What are your takes on COVID19 and the rental market for MTR/STR in resort communities, like Truckee, that are supported by Tech salaries and where WFH will be the norm at least until July?

Thank you so much for your insights in advance! I look forward to being able to pay it forward on BP.

Kristina Ainsworth · Answer

Hello, this is (most likely) my first BP post! I saw this was posted a year ago, but wanted to revisit the question about 30 day rentals vs STR vs long term in Truckee/Tahoe area. My husband is from Reno and we stay in Tahoe every year, (from Austin) we'd love to buy a place, but don't know the best way to rent out with regards to permits, etc. Just wanted to see if things have changed from 1 year ago, I hear there are limited STR permits in some parts of Tahoe, but Truckee is still ok. I think I'd prefer 30 day rents...is that feasible? We are more of the hiking/snowboard types, not the party at the casino types. Are there any wholesalers in the area to work with? TIY. Matt Fine, you have been very generous with your help on all these Tahoe/Truckee threads.

Lindsay Buchanan · Answer

@Kristina Ainsworth

This is hot off the press!

On October 26, 2021, Truckee Town Council approved the extension of the Urgency Ordinance 2021-06, until June 15, 2022.

No adjustments were made to the original language of the Urgency Ordinance 2021-06 the Town Council approved on September 29, 2021.

The following categories remain exempt from the moratorium:

1. Complete applications that were received by the Town prior to the adoption of the Urgency Ordinance on Sept 29, 2021.

2. New owners of a property which was in escrow in connection with a pending sale at the time the Urgency Ordinance was adopted IF a transient occupancy registration certificate was in effect for a property immediately prior to the close of escrow.

3. Registration renewals for the 2022 calendar year.

With all of that being said- you are still able to do 31+ day rentals.

Lindsay Buchanan · Answer

@Kristina Ainsworth, yes that is correct!

Kristina Ainsworth · Answer

@Lindsay Buchanan so this means no STR permits will be looked at until June 15, 2022, correct? Thanks so much for posting!!!

Dustin Allen · Answer

@Mandie Holmes

If the north shore is experiencing anything like the south shore is right now, you can probably get short term rates for long term rentals. The 2/2 1600 sq ft cabin next door rented for $3500 for a 1 month rental in July.

Check craigslist and the property management sites that are local to your property and see what is available and what the rates are like. It’s pretty hard to find anything right now.

Matt Fine · Answer

Hi Mandie, I had a long term rental in TD that was only a 2/2 condo and it was profitable. It was simple and easy to rent. The STR route can be more profitable, but you definitely need to have your systems dialed- or just use a local rental agency. One thing- speaking from my local perspective- most locals absolutely hate STRs. There are 5 on my street and every week, we deal with the same issues- noise, trash-which brings in the bears, speeding, campfire/BBQ smoke (even though they are banned), etc. If you want to make your neighbors happy- don't STR. Additionally- with the COVID situation lingering, the STRs may be shut down again like they were at the end of last winter. In my opinion stick with a longer term- make the renters pay the utilities, keep the neighborhood happy, avoid TOT taxes.

Chad Hale · Answer

@Mandie Holmes There's a difference in the Tahoe region for STRs (less than 30days) and everything else. If doing STR, make sure you understand TOT (Transient Occupancy Tax) rules and requirements. You'll usually make more on a full year STR rental than a fixed lease (ski or whatever). But there is more work with turns, maintenance, tenant service/interactions etc.

Should I STR or medium term lease my Truckee / Tahoe-Donner home

Should I STR or medium term lease my Truckee / Tahoe-Donner home

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