Anyone Airbnb in North Lake Tahoe?

30 Replies

Hey everyone, I live in the Bay Area and have visited the Tahoe area all my life. I know price wise the market in Tahoe has been crazy for some time now however I am wondering if anyone has had success with short term rentals? The beauty of Tahoe is it has two peak seasons and nearly year round people are vacationing there. I have used Airbnb in the area for the better part of a decade as a renter and always have a great time.

I had a number of Airbnb rentals in Maui which has very similar seasonality as Lake Tahoe. I managed to consistently get a 2.5 to 3 year ROI on my properties which was double what I would have gotten going the traditional rental route. the one thing I had to learn was to set my pricing as high as possible during the peak periods and really drop them in the shoulder periods. By doing this I managed to maintain an 85% occupancy rate even in the slow months and I still broke even those months and killed it during the peak times.

Hi @Andrew Neal , I have an STR in Tahoe City and just recently sold another one in South Lake Tahoe. Success depends on how you define it. If you want large cash on cash ROI then Tahoe is going to be tough unless you find some type of value add project. For my particular investing style, I'm looking for vacation house for free model where my property is paid for and cash flow is break even or slightly positive for the year and I get to use the home for up to 14 days per year (plus 'maintenance' trips).

Let me know if you have any specific questions.  Here is a spreadsheet that can also provide you some insights on operating costs.  https://www.dropbox.com/s/xwnw30cmjx32is1/Vacation...

Cheers!

@Rick Momsen very interesting, thanks for sharing. 85% occupancy is fantastic. I have heard of others doing deep discounts during the off peak times as a way to keep income flowing as well as get some reviews that say "wow great place for the price etc." because no other guests see what another paid so it raises perceived value.
@Jon Crosby thanks so much for that spreadsheet it's super helpful. I agree that a vacation home for "free" is a great way to go and seems achievable. I have a realtor friend in Tahoe Cuty area who speaks highly of the Kings Beach area and all the development slated for it. She also advised the quality of renter is a bit higher in North Lake. What was your experience with a South Lake property?

@Andrew Neal Kings Beach is a really popular destination and we shopped there as well before getting our place in Tahoe City.  Tahoe City has way more to do and places to eat though than Kings Beach in my opinion.

South Lake was a great place (it was a cabin) and we enjoyed it as a family while we had it.  Yes, the quality of tenant overall is better so far in North/West Shore for sure.  Interestingly enough, almost all my bookings are Airbnb in North Lake and almost all of them were VRBO in South Lake.  

Here are some blog articles on my experiences so far with our Tahoe properties: 

https://www.biggerpockets.com/blogs/10042/

Hope that helps! 

@Jon Crosby that is very interesting. And yeah I agree about Tahoe City versus Kings Beach. I think her speculation is based inside future development plans that should play out in the coming years so who knows. Do you find that you get fewer rentals in the winter months being closer to the lake? I would assume it all averages out though. Funny I also see that you're in Rocklin and my wife and I nearly moved up there a few months ago.

@Andrew Neal Yeah, they definitely are doing a lot of cool construction and development projects in Kings Beach so that makes sense.  To be honest, we acquired the property earlier this year so we don't have the experience yet on the North shore property, but since we are only 10 minutes from Squaw Valley and Alpine Meadows I'm fairly confident it's going to do just as well as our South Lake property in the winter...where we averaged between 180-200 rental days per year with full occupancy Dec - Feb and Jun-Aug.   

What would you say the average nightly rate was you were charging? I'm wondering if you moved further up market into nicer larger properties would your average nights rented drop due to the higher nightly/weekly rate? Or is the assumption that people going on a vacation typically have the money for a $400+ a night rental?

If you want to step on over to the Nevada side of North Lake Tahoe, I have a listing in #InclineVillage ($360K) that is completely 'turn-key' and would be a perfect place to enjoy the beauty of the lake while generating rental income through #AirBnb!  Over 1,000 sq. ft. with wood-burning fireplace, private deck and garage parking just down the hill from Diamond Peak Ski Resort & within 1 mi. to golfing, Casino & private beach!  and thanks for sharing your spreadsheet @JonCrosby as I've got a couple of properties I rent out via #AirBnb!

@Andrew Neal I have 9 Airbnb units in mammoth lakes right now, which is a pretty comparable market (skiing in the winter, people visiting Yosemite in the summer) 

I have definitely found higher occupancy and higher overall return for smaller properties with lower nightly pricing. Right now, I have a large 3 bedroom property that sleeps 8, and it’s been the biggest pain in my tushie! The price is higher, but the cleaning fee and bed taxes are also so much higher, expenses, supplies, linens, etc. Bottom line, I made more net income on a pet friendly one bedroom unit across the street. ~80- 85% occupancy for the larger property, vs ~90-95% occupancy for the smaller unit. (Which also happened to be about a third of the cost to acquire). Definitely learned our lessons on that one. 

All that being said, maybe the clientele in Tahoe is a bit different, the larger properties might work well there. And if your goal is just to vacation for free, and your family needs a bigger unit, then obviously that would make more sense. 

I'm a little late to this thread, but wanted to add my two cents. I'm a realtor in North Lake, but also own and operate an STR in the heart of kings beach. My husband and i had so much success operating our str that he actually left his W2 seasonal jobs and we started a STR management company. I have quite a few clients who run the vacation-for-free model by purchasing and then renting out their places. In my opinion, my clients who have done a STR form of BRRRR are doing the best, financially. Like you mentioned, prices are high here right now for good ROI, and on top of that the market is pretty saturated for rentals at the moment, so it's those unique/renovated/thoughtfully designed properties that offer extra character and charm that keep higher occupancy levels and offer a (somewhat better) ROI. STRs are all about the experience and "hashtaggable" moments, more so than just practicality.

On the topic of Kings Beach, you're friend is right!! We bought our first place near downtown in 2013 and while there is still a long way to go, the town has come so far since then already! The new sidewalks and infrastructure have cleaned up the area and there are now loads of pedestrians and bikers that we didnt have before. Each yearthere are more shops and restaurants than before. Tahoe city is definitely the crown jewel of the entire lake, in my opinion, with a cute downtown and loyal fan base, but kings beach is the spot that still leaves room for growth. Some of the plans for the town include almost a "boardwalk" type setting, which would be awesome. There's no other town on the lake that offers a downtown with level beach access to a sandy beach. The summer vibe here is incredible and the winters are getting better with the addition of more restaurants and all the nice new street lights. 

@Monica Smith thanks for sharing your insight. You make me want to take a trip up soon! And that's awesome the income from your STR has been able to replace some of your husband's income. I know that the Tahoe market for STR is unlike any other and I personally have never stayed in a hotel while visiting. King's Beach has grown a ton. WHich brokerage are you with out of curiosity?

@Shelby Pracht I can definitely see who the mammoth lakes area is such a draw for people. Do you self manage all 9 units?

@Andrew Neal , I'm with Oliver Lux and work on a team of three along with my partners Mark Moore and Kimberly Moore. 

Our str has more than replaced my husbands ENTIRE income, surprisingly. (Although in a ski town, that's not exactly a huge statement haha). We fell into a unique situation and it has completely transformed our lives. Our house flooded during the gigantic winter of 16/17 and since it came from outside the house, insurance didnt cover it, of course. We refused to dip into savings (we were live in flipping it to turn into a rental and were pretty close to being able to move onto our second home, which we are now in) so we decided to instead stay in our travel trailer on the weekends, block off the lower level where the flooding occurred and str the top of the house to pay for the reno. That was March of 2017 and it was so darn successful we kept doing it after that winter. We lived in our 16ft travel trailer full time and still do...although now it is parked on our awesome new property that is home to our second fixer upper. The first home is now a full time rental and we are managing 5 other homes as well. Listening to bigger pockets these past three years gave us the gift of being able to think outside the box in different situations and we are so grateful! 

@Monica Smith what a great story! I'm sure many people who have just given up after that flooding.

I have done some video work for a few folks out of the Pacific Union office up there. Shot a house in Martis Camp a while back.

@Andrew Neal I have looked into doing this in Mammoth Lakes and my projections show that it’s hard to get positive cash flow with a 35% management fee. As @Shelby Pracht is doing, self management makes the numbers come out far better. But I don’t want to self manage! Therefore I just decided to rent in Mammoth Lakes when I go and skip the negative cash flow. It’s an appreciation market so that’s where the ROI is in my opinion!

@Andrew Neal , small world! Although as of yesterday, pacunion is now compass :) 

My team and I have a pretty cool listing in Kings Beach right now that you might want to check out. We actually got the listing because I originally reached out to the seller this last spring to try to buy it ourselves. Seller couldn't carry, so we had to move on, but then he asked to list with us since I definitely believe in the property. It's a 3/2 sfr with adjacent triplex of studios. It's on the MLS and can be found at 247 chipmunk st. Definitely one of the last remaining pockets of less-desirable surroundings. The "grid" , as the perfectly north to south and east to west streets behind downtown in KB is called, is still only beingfixed up house by house as the major projects are in downtown itself.

I'd be happy to send you numbers on this listing, if you'dlike. I'll warn you now that no property in north tahoe is going to stack up to traditional investor metrics. That's just the way our market is currently. But this property would at least offer set income in the triplex while still providing a 3/2 to str and enjoy. It's only 1 block from downtown, but the studios are currently the ugliest things on the block so the new owner gets to increase the look of the neighborhood immediately haha

I'm interested in running the numbers for a 2+2 or 3+2 place with a garage in Tahoe City for a winter ski lease with my friends + summer short term rental. I'd charge ~$1000 a slot for Jan-May (8-10 people), then short term the rest of the time.

I wouldn't self manage, so I get the point on unique, well designed, charming places being a priority.

@Monica Smith interesting listing.  If I was still in the area I might take a stab at turning all of them into vacation rentals, seems like the numbers would pencil.

Hey Monica, are the restrictions on vacation rentals as strict on the North Shore as they are in South Lake Tahoe?

This is all great info!!  My question is similar to Andrew's question above....

New to BP and this thread but I have a question on this topic as well for anyone who might know... We are also interested in the same areas in this thread in North Lake Tahoe....specifically: Tahoe City, Kings and Incline. I have heard and researched that some HOAs in the North Lake Tahoe area are now limiting the ability for owners to rent their properties on AirBNB/VRBO etc. I suppose it's due to them bringing in "transient" occupants to the area. Has anyone had issues with their HOA's/neighborhoods shutting-them-down and disallowing this ability to rent out. My understanding is that this is pretty rampant in South Lake and Incline especially.....? Thanks!

Originally posted by @Jon Crosby :

@Andrew Neal Yeah, they definitely are doing a lot of cool construction and development projects in Kings Beach so that makes sense.  To be honest, we acquired the property earlier this year so we don't have the experience yet on the North shore property, but since we are only 10 minutes from Squaw Valley and Alpine Meadows I'm fairly confident it's going to do just as well as our South Lake property in the winter...where we averaged between 180-200 rental days per year with full occupancy Dec - Feb and Jun-Aug.   

 Just came across this. How has the winter rental market been for you so far? 

Anecdotally speaking, there seems to be a ton of development around Tahoe City and the west shore right now.