Mammoth Lakes for Airbnb Investment?

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Mammoth Lakes for Airbnb Investment?

Matt Smith
San Francisco, CA · Member since 2014 · 161 posts · 26 votes

HI,

I am wondering whether Mammoth Lakes is a good investment for an Airbnb property. Any target condo? What's the occupancy rate to expect? Please share your experience. Thank you!

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Shelby Pracht
Property Manager · Mammoth Lakes, CA · Member since 2014 · 262 posts · 229 votes
9y

You are correct that it is a zoning restriction, @Jon Latorre. All condo complexes in Mammoth are zoned to allowed nightly rentals (though there are a couple of complexes that don't allow them per HOA restrictions). No single family home is allowed to be rented for less than 30 days UNLESS it is specifically zoned "resort". There are only 3 small areas that have this newer "resort" zoning (Graybear, Stonegate, and a strip behind Hidden Valley). The "homes" that you are seeing on VRBO are either:

1. rented illegally

2. in one of these small "resort" zonings,

3. not actually an SFR at all, but a condo unit that they've marked as a home. I think the majority falls into this category. People want to advertise it as a home if it's a bigger condo.

I hope that helps a little bit!

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  • Jon Latorre
    Real Estate Broker · Boise, ID · Member since 2017 · 101 posts · 41 votes
    9y

    Matt, 

    I can't speak to if the area is a "good investment" or not, I suppose that is dependent on the deal you get on your property (I am not a real estate agent) but I will say that short term rentals (not synonymous with AirBnB) can do very well in Mammoth Lakes. It all depends on specific location (distance to mountain), property type, luxury class, etc.

    Are you set on a condo or would you be interested in exploring your options with single family homes? There is a high supply of condos in the area and a SFR would allow you to differentiate yourself a bit.

    Message me if you would like to talk more! Good luck!

    0Reply
  • Account Closed
    Saint George, UT · Member since 2017 · 24 posts · 15 votes
    9y

    Talk to Shelby. She is a real estate investor and agent in Mammoth Lakes. See link...

    https://www.biggerpockets.com/users/slc0003

    1Reply
  • Lee RipmaPro Member
    Rental Property Investor · Prairie Village, KS · Member since 2015 · 2k+ posts · 2k+ votes
    9y
    Yes, Shelby is the pro in this area! Due to municipal code restrictions if you want to do short term rentals you can only do it in condos!
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  • Justin Tahilramani
    Rental Property Investor · Fayetteville, NC · Member since 2014 · 884 posts · 670 votes
    9y

    @Matt Smith - I would be very cautious about investing in a property with the sole intent of utilizing it as a STR. States and local municipalities are really starting to put pressure on homeowners that are operating STRs. You might be able to operate legally, but you will want to do some in depth research on zoning, restrictive covenants, HOA bylaws, etc. Do you have a "Plan B" for the property if STR does not work out?

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  • Shelby Pracht
    Property Manager · Mammoth Lakes, CA · Member since 2014 · 262 posts · 229 votes
    9y

    Thanks for the shout @Account Closed I've got a small 1-bedroom condo that we've been Airbnb-ing and have had a really great experience and returns! We've been grossing approximately 4k/month in rental income with an average occupancy of 90% since June 2016, when we started full time. What I love about Mammoth vs other ski resorts is its proximity to Yosemite National Park that provides us with a steady stream of visitors all summer and fall. I'm happy to share as much data as you'd like, just let me know what questions you have.

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  • Jon Latorre
    Real Estate Broker · Boise, ID · Member since 2017 · 101 posts · 41 votes
    9y

    @Shelby Pracht From what I'm seeing there are 47 SFR's being advertised on VRBO alone in Mammoth Lakes. That is not taking into account any other marketing channels.

    Might you be able to expand a bit on the restrictions in the area? I am very interested now. From what I understand it is mostly a zoning issue that applies to certain areas and not necessarily the type of property. Is there a minimum stay that these sfr's must abide by?

    Thanks!

    0Reply
  • Shelby Pracht
    Property Manager · Mammoth Lakes, CA · Member since 2014 · 262 posts · 229 votes
    9y

    You are correct that it is a zoning restriction, @Jon Latorre. All condo complexes in Mammoth are zoned to allowed nightly rentals (though there are a couple of complexes that don't allow them per HOA restrictions). No single family home is allowed to be rented for less than 30 days UNLESS it is specifically zoned "resort". There are only 3 small areas that have this newer "resort" zoning (Graybear, Stonegate, and a strip behind Hidden Valley). The "homes" that you are seeing on VRBO are either:

    1. rented illegally

    2. in one of these small "resort" zonings,

    3. not actually an SFR at all, but a condo unit that they've marked as a home. I think the majority falls into this category. People want to advertise it as a home if it's a bigger condo.

    I hope that helps a little bit!

    3Reply
  • Evan Gallagher
    Member since 2019 · 2 posts · 1 vote
    7y

    Shelby, I'm looking to make my first foray into this market. I have a friend who just purchased a 1BR and coincidentally she said she's making $4K a month. I was wondering if that is in part due to the great snow year. Do you generally do that well on your condos in drier years?

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  • Twana RasoulBusiness Member
    Real Estate Agent · San Diego, CA · Member since 2017 · 1k+ posts · 1k+ votes
    7y

    @Matt Smith make sure you only look into condos. SFR are not eligible for STR. A couple of things to factor into your numbers is HOA, management fee, I imagine atleast 15-25%. Also, mammoth is amazing but have backup plan for STR as vacancy likely to significantly increase if large snowfall is not there one year. Summers are becoming more and more popular there. Best of luck!

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  • Shelby Pracht
    Property Manager · Mammoth Lakes, CA · Member since 2014 · 262 posts · 229 votes
    7y

    Hey @Evan Gallagher, those numbers are totally reasonable. I had a one bedroom that was grossing 5-6k/month during the winter during 2018 and 4-5k/month during the summer, which was significantly drier than this year. (This particular unit is pet friendly, which are higher in demand so will help with revenue.) 

    The snow definitely motivates more people to come up, but in my experience (not to say it won't change) but there are always people looking to come up for a ski vacation, even if there isn't "fresh pow". A lot of families with kids in school or couples with set work schedules will plan trips months in advance regardless of weather. You just need to make sure your unit has great photos, great reviews, and good pricing so that it becomes booked first.

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  • Evan Gallagher
    Member since 2019 · 2 posts · 1 vote
    7y

    @Shelby Pracht thanks so much for the reply! That's really encouraging because numbers like those make the math on some of the properties I am eying work much better. The boom/bust cycle of CA powder skiing was the one thing giving me pause.  

    1Reply
  • Shelby Pracht
    Property Manager · Mammoth Lakes, CA · Member since 2014 · 262 posts · 229 votes
    7y

    @Evan Gallagher yeah it all depends on how you do it. Like I said finding a unit where the HOA allows renters to have pets is huge, and then finding property management that is going to be active in their pricing to keep it rented will make all the difference in the world. Good luck!

    1Reply
  • Tracy Ikada
    Member since 2019 · 1 post · 1 vote
    7y

    @Shelby Pracht Thanks for the great info! I am looking to purchase a condo in Mammoth for personal use + STR to offset the the cost. Weighing cost/benefit for a 1 vs 2 bedroom - if the STR demand is higher for one over the other, and how much higher the return is on a 2 bedroom, in general? Also, can I ask if your 1 bedroom is near town or the slopes? Thanks in advance.

    1Reply
  • Shelby Pracht
    Property Manager · Mammoth Lakes, CA · Member since 2014 · 262 posts · 229 votes
    7y
    Originally posted by @Tracy Ikada:

    @Shelby Pracht Thanks for the great info! I am looking to purchase a condo in Mammoth for personal use + STR to offset the the cost. Weighing cost/benefit for a 1 vs 2 bedroom - if the STR demand is higher for one over the other, and how much higher the return is on a 2 bedroom, in general? Also, can I ask if your 1 bedroom is near town or the slopes? Thanks in advance.

     Hey Tracy, in my personal experience the return is not any higher for a two bedroom than a one bedroom, it's probably pretty comparable.  Although a 2 bedroom will rent for a little bit more, all of your expenses and your purchase price will also be higher. At that point it really depends on what works better for your family and how much initial cash you want to put down.

    My original one bedroom was in the middle of town. I've actually since sold the unit and now am managing a handful of unit for other owners I've met. Our units with the highest returns are a two bedroom that's walking distance to Eagle Lodge (and more high end) and some studio units that are walking distance to the Village. I also manage a handful that a right in the center of town and they stay just as booked and don't gross that much less. Hope that helps

    2Reply
  • Nicholas Giannakopoulos
    Member since 2019 · 4 posts · 0 votes
    7y

    @Shelby Pracht thank you so much for all the helpful info! I have been trying to do a lot of research on properties similar to your situation but the main unknown variable I'm facing is trying to estimate occupancy rate.

    I noticed earlier in the thread you mentioned you've seen an average occupancy rate of 90% since you started but that was almost 2 years ago, are you still experiencing similar occupancy rates? That seems like such a high number, I would have thought it might have been closer to 30-50% at most! Now that it's been a longer span of time you've been doing this, what would you estimate the average occupancy rate throughout the year?

    Thanks again!

    0Reply
  • Shelby Pracht
    Property Manager · Mammoth Lakes, CA · Member since 2014 · 262 posts · 229 votes
    7y

    @Nicholas Giannakopoulos

    Here is the last 12 months occupancy rates TOTAL for all 10 units that we're managing

    Feb '19- 96%

    Jan '19- 97%

    Dec '18- 94%

    Nov '18- 57%

    Oct '18- 77%

    Sept '18- 74%

    Aug '18- 90%

    July '18- 97%

    June '18- 92%

    May '18- 73%

    April '18- 73%

    March '18- 93%

    Avg for last 12 months, 84% occupancy with 10 units.

    2Reply
  • Nicholas Giannakopoulos
    Member since 2019 · 4 posts · 0 votes
    7y

    @Shelby Pracht that is amazingly helpful information! Is there anyway you could provide a link to one or a couple of your properties so that I can get an idea if the ones I am looking at are similar?

    Thanks again for the info :)

    0Reply
  • Paul Sandhu
    Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    7y

    @Shelby Pracht  What's up with November?  I really don't want to know, but just wondered if it would apply to my STRs.  They are typically vacant from Thanksgiving until after New Years day.  

    0Reply
  • Shelby Pracht
    Property Manager · Mammoth Lakes, CA · Member since 2014 · 262 posts · 229 votes
    7y

    @Nicholas Giannakopoulos You can check out my listings at

    https://www.airbnb.com/users/20911050/listings

    @Paul Sandhu I think our clientele is very different. My guests come to ski all winter and to hike/bike/fish etc in the summer. November is too cold to hike but there isn't enough snow yet to really ski, so it's always been our slowest month.

    0Reply
  • Nicholas Giannakopoulos
    Member since 2019 · 4 posts · 0 votes
    7y

    @Shelby Pracht thank you for sharing, this information has been very helpful! I do have one more question that is an important variable when trying to break out the calculations and that is what is the average nightly stay per rental?

    Since the cost to people is a combination of nightly stay + cleaning fees + service charges, it seems like the average number of nights each guest rents a property for is very important to figuring out the average revenue and cost per stay. Does airbnb provide a metric to help understand what the average number of days booked per reservation?

    Thanks again!

    0Reply
  • Shelby Pracht
    Property Manager · Mammoth Lakes, CA · Member since 2014 · 262 posts · 229 votes
    7y
    Originally posted by @Nicholas Giannakopoulos:

    @Shelby Pracht thank you for sharing, this information has been very helpful! I do have one more question that is an important variable when trying to break out the calculations and that is what is the average nightly stay per rental?

    Since the cost to people is a combination of nightly stay + cleaning fees + service charges, it seems like the average number of nights each guest rents a property for is very important to figuring out the average revenue and cost per stay. Does airbnb provide a metric to help understand what the average number of days booked per reservation?

    Thanks again!

    That's a great question! As far as I know, Airbnb does not have a metric for that (although theyve definitely been improving their performance tab lately). However, if you download transaction history into a spreadsheet, it includes the length of each stay so you should be able to do some quick excel magic to get an average.

    The length of stays we have depends highly on the season and a bit on the unit itself. In the winter our stays are longer, mostly 2-4 nights at our smaller units and 4-6 at our larger ones. During the summer we are probably 85% one night stays since almost all of our guests are foreign tourists on the way from Death Valley to Yosemite. 

    However, this really doesn't affect the revenue at the end of the day. For example, if you have your nightly rate set at $100, a $50 cleaning fee and $10 miscellaneous fees/Airbnb charges per booking, the guests that stay one night will pay $160, while a guest that stays 2 nights will pay $260, which is only 130/ night. However, you dont get the cleaning fee or the Airbnb fee anyways, so either way you are getting your $100/night. Your cleaner and Airbnb make more money, but you definitely dont miss out on any. (Sorry if I way dumbed that down,  I have a few owners that still don't seem.to grasp that but it seems really common sense to me)

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  • Nicholas Giannakopoulos
    Member since 2019 · 4 posts · 0 votes
    7y

    @Shelby Pracht wait, the host does not keep the cleaning fee as a way to pay for the unit to get cleaned? I knew that Airbnb keeps the service fee as well as 3% of the listing price but I thought the cleaning fee goes to yourself. Are you saying that Airbnb collects the cleaning fee and the listing owner never sees any of that?

    Thank you for breaking it down for me, I completely understand your explanation. It sounds like for simplicity sake you might estimate throughout the course of the year the average length of rental might be about 2 days for the smaller 1-2 bedroom condo-type properties?

    0Reply
  • Shelby Pracht
    Property Manager · Mammoth Lakes, CA · Member since 2014 · 262 posts · 229 votes
    7y
    Originally posted by @Nicholas Giannakopoulos:

    @Shelby Pracht wait, the host does not keep the cleaning fee as a way to pay for the unit to get cleaned? I knew that Airbnb keeps the service fee as well as 3% of the listing price but I thought the cleaning fee goes to yourself. Are you saying that Airbnb collects the cleaning fee and the listing owner never sees any of that?

    Thank you for breaking it down for me, I completely understand your explanation. It sounds like for simplicity sake you might estimate throughout the course of the year the average length of rental might be about 2 days for the smaller 1-2 bedroom condo-type properties?

     No, the host gets the cleaning fee. I'm just saying the cleaning fee goes to the cleaner, the host doesn't make any money off of it (or at least they shouldn't)

    And I think that average sounds fair for sure

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  • Luck ManuelPro Member
    La Mesa, CA · Member since 2017 · 20 posts · 1 vote
    7y

    I've noticed the price of the Westin Monache units on the market has dropped a fair amount recently. Does anyone have any experience renting the one bedrooms or studios as a STR?

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  • Shelby Pracht
    Property Manager · Mammoth Lakes, CA · Member since 2014 · 262 posts · 229 votes
    7y

    @Luck Manuel we just took on a Westin studio about a month ago.

    We've been avoiding them for awhile because of all the restrictions against self management. The on site management takes 60%, but if you self manage your guests aren't able to use the valet, shuttle, concierge, front desk, pool towels, etc etc. We thought guests would really struggle with being in a hotel environment but not able to run down to the desk to ask questions or get whatever they needed. So far we havent had any problems but I'm sure we will at some point. Hoping that the higher returns from having a "luxury" unit right in the village will outweigh to headaches I'm sure we'll encounter.

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