Rental Property Investor · Member since 2018 · 78 posts · 53 votes
I’m looking at a small condo in the Truckee Area- interested in Short Term Renting it. I saw the Transient Occupancy Tax (TOT) is 10% and can be transferred to the renter. Is this an issue for renters to pay? How is Truckee for STR overall?
I live in Nevada county where Truckee is located. I'm not sure about the city of Truckee but most if not all STR in unincorporated Nevada County have the TOT collected up front by Airbnb, which is nice. Just price accordingly and your tax is reported and paid directly to the county from Airbnb.
In areas where you do have to collect that separately, there will be a share of folks who complain and refuse to pay. So a lot of people just raise their prices, pay the TOT from the amount collected and don't mention it to guests.
Competition for STRs is getting pretty fierce these days. In Truckee and Tahoe basin, a lot of people rent out their condos and cabins for a 6 month lease during ski season. There is definitely a strong demand for that for smaller more reasonably priced places.
Yes, TOT is common in most counties and guest do not have trouble paying for it, it's the same tax they have to pay when they stay at a hotel.
Your other question is a little more involved but I will say that I looked a several properties in the Truckee/Tahoe Donner area before finally buying one in Tahoe City earlier this year. My short answer to you is, I would expect about a 50% occupancy rate and probably not more than $200/night ADR (average daily rate) depending on the size, quality and location of your STR. Therefore in order to cash flow you are likely going to need to put a lot down for a property in that area.
That being said, Truckee is AWESOME and always in demand for Bay Area and Sacramento visitors. Lake Tahoe just gets more national and international guests as people know to look for it when on Airbnb/VRBO. Therefore Tahoe Occupancy rates are a little higher and demand a slightly higher ADR (average daily rate).
I live in Nevada county where Truckee is located. I'm not sure about the city of Truckee but most if not all STR in unincorporated Nevada County have the TOT collected up front by Airbnb, which is nice. Just price accordingly and your tax is reported and paid directly to the county from Airbnb.
In areas where you do have to collect that separately, there will be a share of folks who complain and refuse to pay. So a lot of people just raise their prices, pay the TOT from the amount collected and don't mention it to guests.
Competition for STRs is getting pretty fierce these days. In Truckee and Tahoe basin, a lot of people rent out their condos and cabins for a 6 month lease during ski season. There is definitely a strong demand for that for smaller more reasonably priced places.
@Jon Crosby
Thanks! 50% occupancy @$200/night is 2-3x more than my HELOC interest per month. I have an large HELOC and using it to buy several
Small condos all cash. That’s the plan anyways.
@Account Closed please be sure to do your homework. The numbers I gave you are extremely high level and that's gross income keep in mind. STRs run at a 50-70% Op Ex Ratio so you need to take that into account. Here is a spreadsheet I share with a lot of other first time STR investors that helps put things in perspective. I actually built this on my experience with our South Lake Tahoe cabin which we had a lot of success with.
@Jon Crosby
Thanks Jon. I’m running a spreadsheet just like this and all the numbers make sense. The numbers you provided for occupancy and average nightly rate (max) are helpful though. I’m unfamiliar with north Lake and don’t know what areas do better than others. If there’s any areas you would stay away from I’d love to know
@Account Closed, those numbers I gave you are very high level once again...and specifically more on the 3 bed/2bath side so keep that in mind as well. If you find a property you like you can use Airdna , Everbooked or even another app I will not mention due to moderation rules to get a better idea on how well it will perform. :-)
As for the specific areas like I said before, Lake Tahoe or pretty much anything south of Squaw Valley is going to perform better but cost more to purchase. Just stay in the triangle of Truckee, Hwy 89 and Hwy 267 and it should do pretty well so long as you have a good property with good customer service in place.