Narrowed it down to Joshua Tree/Yucca Valley/29 Palms area
Orange county, CA · Member since 2023 · 15 posts · 6 votes
Hi,
We are planning to get our first STR and have narrowed it down to high desert area as it will be close enough for us to manage by ourselves.
I am looking for any inputs from current or aspiring STR owners in the area for the insight on how is the market these days? Are there a lot of vacancies. While doing the research I have seen most of the properties have all the dates open, which doesn't bode well. Are the rentals booked last minute in the area? ADRs are also compressing it seems from the data.
Which cities are best to deal with when it comes to STR rules and regulations? Should I be staying away from certain arears?
Also looking for a local realtor who has dealt with STRs in the area or have current STRs? Any and all help is appreciated.
It is scary to get into this without knowing if it would be a good investment, but I want to jump right in now as I have had analysis paralysis for almost 5 years.
Thanks,
Daksh
Hi,
we recently put 2 properties in the Joshua Tree market. There is a lot I would share. First of all, Yucca Valley is heavily restricting permits and they have a cap on them. Max occupancy is 8 and higher than that requires special consideration. Also, there is heavy saturation and our PM has told us the projections are significantly lower than they were 6 months ago. Joshua Tree is similar but with different rules. Definitely more last minute bookings and also lower ADRs. You can still make it work but definitely need the right property. It's tricky for sure. If you have other markets you're looking at I would also consider those. Now, that being said there are a few properties with a pool on sale for a decent price since they're not selling quickly anymore. I'd highly recommend a pool as it significantly increases ADRs, in some cases almost 1.5x to double. I'd also make sure the property is unique and not a cookie cutter home.
We have an amazing agent we used in the area who is very familiar with STRs. I can DM you his info if you need. Happy to discuss more as well.
Avery Carl has a great book called Short Term Rental, Long Term Wealth that is super helpful when purchasing a STR.
I would say most bookings out there right now are last minute since it’s the off season.
Quick google searches should direct you in what you need to know about regulations.
I've seen multiple posts about how saturated Joshua Tree is so check that area carefully before buying anything there.
Hi,
we recently put 2 properties in the Joshua Tree market. There is a lot I would share. First of all, Yucca Valley is heavily restricting permits and they have a cap on them. Max occupancy is 8 and higher than that requires special consideration. Also, there is heavy saturation and our PM has told us the projections are significantly lower than they were 6 months ago. Joshua Tree is similar but with different rules. Definitely more last minute bookings and also lower ADRs. You can still make it work but definitely need the right property. It's tricky for sure. If you have other markets you're looking at I would also consider those. Now, that being said there are a few properties with a pool on sale for a decent price since they're not selling quickly anymore. I'd highly recommend a pool as it significantly increases ADRs, in some cases almost 1.5x to double. I'd also make sure the property is unique and not a cookie cutter home.
We have an amazing agent we used in the area who is very familiar with STRs. I can DM you his info if you need. Happy to discuss more as well.
Hi,
we recently put 2 properties in the Joshua Tree market. There is a lot I would share. First of all, Yucca Valley is heavily restricting permits and they have a cap on them. Max occupancy is 8 and higher than that requires special consideration. Also, there is heavy saturation and our PM has told us the projections are significantly lower than they were 6 months ago. Joshua Tree is similar but with different rules. Definitely more last minute bookings and also lower ADRs. You can still make it work but definitely need the right property. It's tricky for sure. If you have other markets you're looking at I would also consider those. Now, that being said there are a few properties with a pool on sale for a decent price since they're not selling quickly anymore. I'd highly recommend a pool as it significantly increases ADRs, in some cases almost 1.5x to double. I'd also make sure the property is unique and not a cookie cutter home.
We have an amazing agent we used in the area who is very familiar with STRs. I can DM you his info if you need. Happy to discuss more as well.
@Yash Bhatt, thanks a lot for the local insight. I will DM you regarding this.
It is scary to get into this without knowing if it would be a good investment, but I want to jump right in now as I have had analysis paralysis for almost 5 years.
Sorry, but while you were analyzing, the best time to buy has 'largely' passed you buy. I say 'largely' because it is always a good time to buy the right property.
So why jump in now? Wait until the market has calmed down and the economy is kinda back to normal. You've already made a mistake by waiting, why compound it by 1) buying in a heavily saturated area with 2) a lot of restrictions, 3) with high interest rates (that will impact your cash flow heavily).....?
Not trying to be a downer, just looking realistically IMHO....
I've seen multiple posts about how saturated Joshua Tree is so check that area carefully before buying anything there.
This. I was strongly considering it for a while until this winter rolled around, which would be the high season. Started searching for weekends a month out and there were over 1000+ options. Even when looking at an upcoming weekend there were still 400+. Lots of very nice listings as well with wide open calendars.
If you are going to invest there, bring your A+ game and buy a property that has something going for it from a nature perspective (nice view, privacy, boulders/cliffs in the backyard, etc).
Hi Daksh my mom actually bought a single family in Yucca Valley about 10 years ago and lived there for a bit then she rented it out for a few years. She had a little bit of passive income as the rent was not to high and the mortgage was not either. She just did a cash out refi to rehab her house to convert it into an STR. Shes about done now with the rehab and is going to start the process for getting the permits to do run the STR. I'll be happy to give you some updates on the progress once she lists it and starts getting it booked.
I would advise to wait.... see what these areas are doing after 1 years of "slow down" all of the desert areas you mentioned boomed the last 2 years and everyone bought there during the COVID frenzy and are very over saturated. And the numbers you see on Airdna etc are not current numbers- they are averaged from the last 12 months. So wouldn't expect the same returns at all. Esp bc prices to purchase havn't dropped lower bc demand is still up.
I would advise you to wait for prices to drop, or wait and see what the vacancy #'s are in 8 months from now in these areas specifically bc of the amount of saturation.
Also, I have a feeling people might not like owning an STR that bought during the BOOM and might be selling in the next year.... might be able to pick up turnkey STRs for a good deal by waiting. That is personally what I am doing right now for all STRs in CA.
It is scary to get into this without knowing if it would be a good investment, but I want to jump right in now as I have had analysis paralysis for almost 5 years.
Sorry, but while you were analyzing, the best time to buy has 'largely' passed you buy. I say 'largely' because it is always a good time to buy the right property.
So why jump in now? Wait until the market has calmed down and the economy is kinda back to normal. You've already made a mistake by waiting, why compound it by 1) buying in a heavily saturated area with 2) a lot of restrictions, 3) with high interest rates (that will impact your cash flow heavily).....?
Not trying to be a downer, just looking realistically IMHO....
@Bruce Woodruff, I agree with you and that is my feeling as well. I just don't want to keep on waiting as I did previously. Maybe I should probably look for some other place or some other strategy to start REI.
Anyways I was going to just start the process now and was planning to see how market behaves to buy it in 6 months or so.
I've seen multiple posts about how saturated Joshua Tree is so check that area carefully before buying anything there.
This. I was strongly considering it for a while until this winter rolled around, which would be the high season. Started searching for weekends a month out and there were over 1000+ options. Even when looking at an upcoming weekend there were still 400+. Lots of very nice listings as well with wide open calendars.
If you are going to invest there, bring your A+ game and buy a property that has something going for it from a nature perspective (nice view, privacy, boulders/cliffs in the backyard, etc).
@Jon Martin, that is exactly what I was seeing. I never researched in Joshua Tree area prior to this month and what I was seeing was not encouraging in terms of availability on their calendars. I thought maybe I was looking at the wrong dates and the bookings are all in week of travel.
Maybe I need to look somewhere else or wait a bit for prices to come down.
Hi Daksh my mom actually bought a single family in Yucca Valley about 10 years ago and lived there for a bit then she rented it out for a few years. She had a little bit of passive income as the rent was not to high and the mortgage was not either. She just did a cash out refi to rehab her house to convert it into an STR. Shes about done now with the rehab and is going to start the process for getting the permits to do run the STR. I'll be happy to give you some updates on the progress once she lists it and starts getting it booked.
@Carlos Valencia, that would be great help. Hopefully she can get it up and running soon with good cash flow.
I would advise to wait.... see what these areas are doing after 1 years of "slow down" all of the desert areas you mentioned boomed the last 2 years and everyone bought there during the COVID frenzy and are very over saturated. And the numbers you see on Airdna etc are not current numbers- they are averaged from the last 12 months. So wouldn't expect the same returns at all. Esp bc prices to purchase havn't dropped lower bc demand is still up.
I would advise you to wait for prices to drop, or wait and see what the vacancy #'s are in 8 months from now in these areas specifically bc of the amount of saturation.
Also, I have a feeling people might not like owning an STR that bought during the BOOM and might be selling in the next year.... might be able to pick up turnkey STRs for a good deal by waiting. That is personally what I am doing right now for all STRs in CA.
@Melissa Nash, that is a great advice. I wasn't believing the AirDNA numbers anyway but I was hoping it is not going to be half of what they are predicting,
If the vacancies stay the way they are right now, there is no way these current prices will sustain.
Do you currently own STRs in the area or around? are any areas doing better than others?
I do own in Palm Springs and numbers are way down.... I am in the RED on my property there and I bought it for a half what its appraising for, but again-- it has its value in my portfolio right now. I sold a property in Desert Hot Springs last year and glad I did bc its really really slow there. I know a lot of hosts in JT and they are also reporting big slow downs. I think its over saturation........ they are still desirable areas and people are traveling but A LOT more to choose from and it drives the prices down.
Yucca Valley/Joshua Tree are very saturated with STR's. I grew up there and am a part-time local, as I still have family there. I live in Irvine. I had two STR's in JT but sold them. You should follow/talk to Patryk Switek on FB, IG, etc. He is a good consultant on how to stand out in that marketplace. I'm happy to talk, too. I'm very active in the area in various capacities.
Hi,
We are planning to get our first STR and have narrowed it down to high desert area as it will be close enough for us to manage by ourselves.
I am looking for any inputs from current or aspiring STR owners in the area for the insight on how is the market these days? Are there a lot of vacancies. While doing the research I have seen most of the properties have all the dates open, which doesn't bode well. Are the rentals booked last minute in the area? ADRs are also compressing it seems from the data.
Which cities are best to deal with when it comes to STR rules and regulations? Should I be staying away from certain arears?
Also looking for a local realtor who has dealt with STRs in the area or have current STRs? Any and all help is appreciated.
It is scary to get into this without knowing if it would be a good investment, but I want to jump right in now as I have had analysis paralysis for almost 5 years.
Thanks,
Daksh
Hi Daksh, realtor and short-term rental owner in the high desert here. I've helped several BP members acquire properties for the purpose of renting out on a short-term basis in the Joshua Tree area.
First thing to know is info on the current regulation landscape. Currently, only areas under San Bernardino County jurisdiction are not bound by a cap on permits. The City of Yucca Valley has implemented a 10% cap in relation to the total available single-family housing stock. Currently they have about 30 or so permits remaining before they reach this cap. After this, you have to wait for a permit to expire and not renew or wait until the housing stock increases which will increase the number of available permits.
The City of 29 Palms has a 500 permit cap and they are already at max capacity so you will have to go on a waiting list in the Town of 29 Palms.
There area areas of Yucca Valley and 29 Palms that are under San Bernardino County jurisdiction. If you need help determining whether a specific property is under City or County jurisdiction, let me know.
All of Joshua Tree is under San Bernardino County jurisdiction and not bound by any cap at the moment. However, it does appear that a cap limit is coming down the pipeline in 2023 or 2024 so waiting too long may work against you.
Now, regarding oversaturation. This isn't strictly a California High Desert phenomenon. You're going to run into this in most of the major STR markets because within the last 2 years we have seen a massive spike in available inventory.
In order to compete with the competition now, hosts/owners/operators need to step up their game and be willing to invest in good quality furniture, memory foam mattresses, high quality linens, professional seasonal photography, etc.
In the high desert, most visitors are looking for peace, quiet, privacy, and amazing scenery so this means stay away from purchasing homes in residential neighborhoods with neighbors on all sides. You want to choose a location that is less densely populated. Many buyers who acquired properties in ill-advised locations right after the pandemic during the STR gold rush, are either struggling now or have sold off already. There is a good chance that after this high season is over, we will see another wave of properties hitting the market from owners who are unable or unwilling to stomach the low season.
I can tell you that my property is doing well. We are booked out through April and May is filling in nicely. We are also starting to get August bookings from the stargazers who come for the meteor showers in August.
The high season in the California High Desert starts in October and ends in mid-May and the low season is mid-may to October.
Feel free to reach out with more specific questions.
Hi,
We are planning to get our first STR and have narrowed it down to high desert area as it will be close enough for us to manage by ourselves.
I am looking for any inputs from current or aspiring STR owners in the area for the insight on how is the market these days? Are there a lot of vacancies. While doing the research I have seen most of the properties have all the dates open, which doesn't bode well. Are the rentals booked last minute in the area? ADRs are also compressing it seems from the data.
Which cities are best to deal with when it comes to STR rules and regulations? Should I be staying away from certain arears?
Also looking for a local realtor who has dealt with STRs in the area or have current STRs? Any and all help is appreciated.
It is scary to get into this without knowing if it would be a good investment, but I want to jump right in now as I have had analysis paralysis for almost 5 years.
Thanks,
Daksh
Hi Daksh, realtor and short-term rental owner in the high desert here. I've helped several BP members acquire properties for the purpose of renting out on a short-term basis in the Joshua Tree area.
First thing to know is info on the current regulation landscape. Currently, only areas under San Bernardino County jurisdiction are not bound by a cap on permits. The City of Yucca Valley has implemented a 10% cap in relation to the total available single-family housing stock. Currently they have about 30 or so permits remaining before they reach this cap. After this, you have to wait for a permit to expire and not renew or wait until the housing stock increases which will increase the number of available permits.
The City of 29 Palms has a 500 permit cap and they are already at max capacity so you will have to go on a waiting list in the Town of 29 Palms.
There area areas of Yucca Valley and 29 Palms that are under San Bernardino County jurisdiction. If you need help determining whether a specific property is under City or County jurisdiction, let me know.
All of Joshua Tree is under San Bernardino County jurisdiction and not bound by any cap at the moment. However, it does appear that a cap limit is coming down the pipeline in 2023 or 2024 so waiting too long may work against you.
Now, regarding oversaturation. This isn't strictly a California High Desert phenomenon. You're going to run into this in most of the major STR markets because within the last 2 years we have seen a massive spike in available inventory.
In order to compete with the competition now, hosts/owners/operators need to step up their game and be willing to invest in good quality furniture, memory foam mattresses, high quality linens, professional seasonal photography, etc.
In the high desert, most visitors are looking for peace, quiet, privacy, and amazing scenery so this means stay away from purchasing homes in residential neighborhoods with neighbors on all sides. You want to choose a location that is less densely populated. Many buyers who acquired properties in ill-advised locations right after the pandemic during the STR gold rush, are either struggling now or have sold off already. There is a good chance that after this high season is over, we will see another wave of properties hitting the market from owners who are unable or unwilling to stomach the low season.
I can tell you that my property is doing well. We are booked out through April and May is filling in nicely. We are also starting to get August bookings from the stargazers who come for the meteor showers in August.
The high season in the California High Desert starts in October and ends in mid-May and the low season is mid-may to October.
Feel free to reach out with more specific questions.
Hi,
We are planning to get our first STR and have narrowed it down to high desert area as it will be close enough for us to manage by ourselves.
I am looking for any inputs from current or aspiring STR owners in the area for the insight on how is the market these days? Are there a lot of vacancies. While doing the research I have seen most of the properties have all the dates open, which doesn't bode well. Are the rentals booked last minute in the area? ADRs are also compressing it seems from the data.
Which cities are best to deal with when it comes to STR rules and regulations? Should I be staying away from certain arears?
Also looking for a local realtor who has dealt with STRs in the area or have current STRs? Any and all help is appreciated.
It is scary to get into this without knowing if it would be a good investment, but I want to jump right in now as I have had analysis paralysis for almost 5 years.
Thanks,
Daksh
Hi Daksh, realtor and short-term rental owner in the high desert here. I've helped several BP members acquire properties for the purpose of renting out on a short-term basis in the Joshua Tree area.
First thing to know is info on the current regulation landscape. Currently, only areas under San Bernardino County jurisdiction are not bound by a cap on permits. The City of Yucca Valley has implemented a 10% cap in relation to the total available single-family housing stock. Currently they have about 30 or so permits remaining before they reach this cap. After this, you have to wait for a permit to expire and not renew or wait until the housing stock increases which will increase the number of available permits.
The City of 29 Palms has a 500 permit cap and they are already at max capacity so you will have to go on a waiting list in the Town of 29 Palms.
There area areas of Yucca Valley and 29 Palms that are under San Bernardino County jurisdiction. If you need help determining whether a specific property is under City or County jurisdiction, let me know.
All of Joshua Tree is under San Bernardino County jurisdiction and not bound by any cap at the moment. However, it does appear that a cap limit is coming down the pipeline in 2023 or 2024 so waiting too long may work against you.
Now, regarding oversaturation. This isn't strictly a California High Desert phenomenon. You're going to run into this in most of the major STR markets because within the last 2 years we have seen a massive spike in available inventory.
In order to compete with the competition now, hosts/owners/operators need to step up their game and be willing to invest in good quality furniture, memory foam mattresses, high quality linens, professional seasonal photography, etc.
In the high desert, most visitors are looking for peace, quiet, privacy, and amazing scenery so this means stay away from purchasing homes in residential neighborhoods with neighbors on all sides. You want to choose a location that is less densely populated. Many buyers who acquired properties in ill-advised locations right after the pandemic during the STR gold rush, are either struggling now or have sold off already. There is a good chance that after this high season is over, we will see another wave of properties hitting the market from owners who are unable or unwilling to stomach the low season.
I can tell you that my property is doing well. We are booked out through April and May is filling in nicely. We are also starting to get August bookings from the stargazers who come for the meteor showers in August.
The high season in the California High Desert starts in October and ends in mid-May and the low season is mid-may to October.
Feel free to reach out with more specific questions.
@Jason Kudo, thanks for great advice on the regulations and caps in the cities I am looking into.
i will DM you!
When researching Real Estate in Joshua Tree, it is important to consider how saturated the market is before making any purchase decisions. With an increasing number of people travelling and relocating to this popular desert town, there are many great opportunities if you take the time to search thoroughly. However, make sure to keep an eye out for overpriced properties that could be difficult to resell when it comes time to move on. Before investing money into a home in Joshua Tree, take the necessary steps such as conducting market research and speaking with experienced Real Estate professionals who know the area well. Doing your due diligence will help ensure that your Real Estate investment is worthwhile!
Thanks for all the Input. For now, I have started researching and looking into getting into an Out of state STR to start with where the vacancies are not that high and is not so saturated. So putting Joshua Tree area on hold.
Any suggestions on what would be best places anywhere in US?