STR in Palm Springs Area
Hi
I am an owner of vacation rentals on the east coast (Philadelphia) and am looking to branch out. After doing some research, I was really impressed with the ADR/Occupancy #s of the Palm Springs area. Not surprisingly, there is lots of competition, which I am fine with. However, the biggest hurdle seems to be the constant changing regulations and ordinances in each neighboring city.
I have done a little research and have compiled some questions and thoughts on a few of the locations I am looking to buy in. Palm Springs has the best revenue #s, but their limit of 32 unique contracts per year is a major concern. Do any current PS owners have any input on this? At the moment I am favoring La Quinta, but still spending time getting familiar with the local ordinances/regulations.
A general question: should I only be looking at homes that don't have HOAs? How common is it for HOAs in the area to allow STRs? Are they extremely strict with noise violations? I could see that becoming a concern. I've noticed some properties on Airbnb that definitely have HOAs, so maybe it isn't a major issue in this area?
City Summary
Palm Desert
I assume this is a no-go? They restrict new STR in the R-1 and R-2 zones, which is basically where the majority of the residential single family homes are?
Palm Springs
My biggest concern with Palm Springs is the limit of only 32 "contracts" per year. This seems like a significant hurdle, depending on how it is enforced. I have noticed that many properties in the area seem to have far more than this many yearly contracts just by looking at their calendars, so I'm a little confused. Do they just ignore the restriction as it is very difficult to enforce?
There are many regulations. Only one property per owner would make it tricky to scale. Quite a few permits, operating requirements and other restrictions. However, Palm Springs sees the highest revenues. The restriction of the limited # of stays per year is my biggest concern by far.
La Quinta
Seems like the regulations are quite relaxed. I don't see anything about limiting the # of stays (contracts) in a caldendar year. For the most part the requirements seem to only be a standard business license and short term rental permits. Proximity is close to PS/PD and browsing #s on AirDNA it seems that revenues are fairly competitive with those cities.
Indio
I don't see any zoning or contract resritctions for this city either. Seems to be similar to La Quinta.
Rancho Mirage
Business License, STR application and a few extra rules in the ordinance make it a little more strict that La Quinta and Indio? Still doesn't seem too strict from first glance.
Indian Wells
This one seems difficult. Only one rental allowed per owner. For new permits there is a 29 night minimum with the exception of the tennis tournament (non-HOA areas). For areas with HOA that have opted out the minimum stay is not regulated by the city but by the HOA. So basically you would have to buy within a HOA that opted out. I don't know how common it is for the HOA to opt-out?
Conclusion:
It seems that the least regulated cities are La Quinta and Indio. Followed by Rancho Mirage. The Palm Desert zoning restrictions probably make it impossible? Im unsure of how many HOAs opt out in Indian Wells, so I can't make a conclusion on that city yet. Palm Springs would be feasible if not for the 32 contract/year limit, but Im not sure how tightly that is enforced.
Any help would be greatly appreciated!