Coachella Valley vacation rentals
Hello all,
We are considering investing in a vacation rental in the Coachella Valley. Ideally, we'd like to get as much occupancy year around but definitely to get the high rents for the music festivals and other events. We have been looking at Indio and LaQuinta. Any thoughts on any part of STRs in the Palm Springs greater area would be appreciated. Thanks!
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I bought a big estate in south Indio in March (8 bedrooms, sleeps 26, on 2 acres) as a vacation rental, and just got a (more conventional) 2700SF place under contract in Indio as well. Also recently purchased a 6-plex in Palm Springs as a vacation rental. If you ever want to compare notes @Clifton Sheng let me know. Places close to the festivals command much higher rates during the festivals, but much lower rates/occupancies the rest of the year (unless they are super special or unique in some way). La Quinta has a bit better balance and occupancy the rest of the year, and there's some reasonably priced in the Cove.
Hi Cifton,
I've heard word that the Coachella festival will be moving closer to Indio, so people I've spoken with are very big on that part of the desert for short term rentals. I do have access to income data for vacation rentals in the desert and the company I'm with does manage vacation rentals. If you want to connect offline, let me know.
Hi Clifton,
I specialize in the Palm Springs area (Palm Springs to Indio). Yes, the Coachella Music Festivals is impacting the desert region. Daily rental rates during the festivals vary dramatically depending on the size, location and amenities of single family homes. Perhaps you can tell me the price range, and all other particulars, you are focused in with this income property.
I look forward to hearing from you.
Hey, Clifton.
We've had really good luck with Palm Desert. It's midway between Palm Springs and Coachella, so you can capitalize on events at both ends of the valley. And Palm Desert seems to have some of the least restrictive vacation rental policies--so that's a definite plus.
Cheers,
Tim
Coachella isn't moving anywhere. They own their venue for the past couple years http://www.pollstar.com/news_article.aspx?ID=800492
Golden Voice owns http://www.stagecoachfestival.com/ , http://splash.coachella.com/ & http://deserttrip.com/
I bought a big estate in south Indio in March (8 bedrooms, sleeps 26, on 2 acres) as a vacation rental, and just got a (more conventional) 2700SF place under contract in Indio as well. Also recently purchased a 6-plex in Palm Springs as a vacation rental. If you ever want to compare notes @Clifton Sheng let me know. Places close to the festivals command much higher rates during the festivals, but much lower rates/occupancies the rest of the year (unless they are super special or unique in some way). La Quinta has a bit better balance and occupancy the rest of the year, and there's some reasonably priced in the Cove.
@Clifton Sheng I have a place in Cathedral City that does very well. I'm a big fan of being as close to Palm Springs as I can. We still do very well on Coachella), but we do well the rest of the year too and just look as Coachella as a bonus. That way If Coachella gets cancelled our business will not be affected.
Dont hesitate to reach out, I love talking vacation rentals!
Hey thanks all for replying so quickly. We've been investors in long term rentals for awhile, but now have a financing source to do vacation properties if the cash flow works. Really exciting to look at STRs as we can pick and "engineer" the investment from the ground up. I would love to speak with each of you as this avenue of investing could be our future direction.
I am also considering buying some property out there for STR's. I'm trying to see what I can do to bring down the property management fees. Is it possible to handle the online renting myself but have the RM do everything else for a lower fee, or is there enough of a reduction in the fee to make it worthwhile. I owned many rentals in my life, I know I do want a good RM company and KNOW they are key to my success.
Cindy,
I'm considering the same arrangement, although we might start with full management. I'm located in the Southbay (So. Cal.) as well. I'd be happy to share what Know so far about the desert area and STR potentials.
@Cindy Marlin There are companies that will charge 10-15% booking, and 10-15% management (so if you provide the bookings you will only pay 10-15% management). Whether they are available, or which company is the right fit depends on your specific property and what area of the Coachella Valley it is in. Feel free to message you if you would like a point in the right direction.
La Quinta is interesting, I've not considered it. I'm still doing research and number crunching to see if it makes financial sense.
I know I need to contact some PM's to see their numbers. I know VRBO has made big changes.
There are many areas in the Coachella Valley that offer great investment properties. Selecting the cities, areas in the cities, and the streets in those areas is the key. Many of our communities are gated and have numerous amenities, but also have high monthly HOA fees, which will affect not only your property appreciation, but also monthly cash flow. I specialize in our valley. Feel free to message me.
La Quinta has some more reasonable prices, and while rental rates are lower much of the year, you may more then make up for it during the festivals if you are in the right areas. For me, it looks more attractive then much of PS/PD, I made an offer on a La Quinta property earlier today.
@Account Closed CAP rate is not normally a metric I use, but if I were to look at it, yes, with 20-30% management the CAP numbers are stll excellent. I will get $125k gross rents on a $500k purchase/investment. Even subtracting property management, that dog will hunt, and quite nicely.
OK guys, please tell me what a "reasonable" or "excellent" cap rate is. There is no such thing.
@Account Closed I assume @Account Closed's definition of a CAP rate is one which encompasses the purchase, or projected purchase price. And NOI, or projected NOI. And I will assume your definition of CAP rate will tell us that is impossible to calculate for an individual property not yet purchased.
David may use one definition, while Bob another. Personally, I'm just looking for great properties, and if I use NOI (past or future expected) divided by purchase price (past, asking, or likely future, or offer price) then, well, that's just one of my data points that helps guide me.
@Account Closed
Very true Bob. Everybody has their own idea of what a reasonable return is. I use the term cap rate loosely, I could have as easily said ROI, you need some metric as a means of comparing one investment to another. For me, I'm looking for returns in the mid teens. I've looked at properties in the Coachella Valley, I didn't see anything with those returns. I was curious if anybody else was.
Exactly, I use the correct definition and use of cap rate. You not only need a sales price and NOI from potential gross income and market operating expenses but an analysis of both. That's just the facts.
Nothing wrong with looking for great properties but using crap rates is probably not the best metric. Heck, even cap rates are not the metric for determining the properties profitability. So there is no such thing as a "reasonable or excellent" cap rate.
And had you used ROI I would not be here questioning you. Also, cap rates are not a metric to be used to compare one investment to another.
Out of curiosity from those folks doing this, what sort of vacancy rates are you seeing? Is that at market rental rates, or slightly below to keep them full, or are you using a dynamic pricing techniques to manage to a particular vacancy rate?
Bumping this back up. Any recent numbers for properties near the Coachella area?
Hi Cliff, would like to hear some numbers as well. I just purchased a property in La Quinta a month ago and trying to get things up and running. I just missed out on Coachella 1 and 2 and will most likely miss Stagecoach this weekend. I’ve been in the area the past few weekends and did notice a lot more foot traffic in the area and surrounding and I expect so this weekend as well. I would love to hear some numbers from anyone with STR’s and how this month has gone.