Rental Property Investor · Fremont, CA · Member since 2017 · 30 posts · 12 votes
Currently looking into buying a 4bed/3bath SFH in Truckee (preferably in Tahoe Donner) and use it as a short term vacation rental. I hear that STR laws are better than South Lake Tahoe (city or El Dorado County) and if all goes well I might get a small profit. Any inputs?
Hi Shan, I'm a remodeling contractor in Tahoe City and we do a lot of work in Tahoe Donner as well. In the past we owned a condo along Northwoods (2/2 with a garage). We rented that as a long term rental and had positive cash flow. Neighboring units were also 2/2s and some did STRs. The best times are around any holiday. Summer in TD can be just as lucrative as winter. The Tahoe Donner amenities are great. If you are able to find a place near the Trout Creek Rec center, that can be a bonus for yourself and any potential renters. Additionally, TD has a marina on Donner Lake that sees a ton of use in the summer. TD also runs great summer camps for kids, so any renters can sign up for the week, drop their kids off and have the day to play themselves. There is a bit of a divide on the feelings around here with STRs, as many long term rentals are being converted to STRs and the area is loosing some workforce housing. I know Truckee and TD recently added or changed some local ordinances and rules. It's bound to be on their website, or just call TD Member services.
The codes around ADUs are changing, so maybe you can find a house with a detached garage and build up an ADU above or below it. Then you could have a short term rental along with a $1,200 long term rental. There are a number of those around.
As for other locations- Squaw/Alpine, Northstar, or Tahoe City. All worth a look.
Do note that the current costs to build a new house in the area, if designed well, can be lower than buying an existing house (especially if you need to remodel it). I am seeing a lot of crappy houses selling for well over $400/sf. Then going right into a $400/sf remodel.
Also recognize that the types of renters in South LT are going to be different than the renters in Truckee, North LT. While this is a total generalization, South LT renters will usually be visiting the casinos and enjoying the nightlife. There is barely anything to do in North LT or Truckee after 9. So these areas seem to get more people that ski, bike& hike all day- head out to dinner then come back to rest up for the next day.
@Shan Dey Tahoe Donner falls under Nevada County which I believe has the standard 10% TOT and yearly permit requirement. Same as El Dorado County. The real drama is in South Lake Tahoe city proper but as far as I know, there are no issues in the County still.
We owned one in Tahoe Paradise and now own in Tahoe City (Placer county). Before we purchased our Tahoe City property we were actually shopping Tahoe Donner, it's a great area and great amenities the HOA offers up there. You will not likely get as much 'national' traffic with it being not Lake Tahoe area but should still get plenty of bookings from the Bay Area and Sacramento.
Thanks Jon! Yeah, trying to stay out of South Lake Tahoe (city) as getting in for 1400 permits for STR is insane. I think Truckee and South Lake Tahoe probably has comparable winter occupancy. But, do you know how is summer occupancy between South Lake Tahoe (county) and Tahoe Donner/Truckee?
Hi Shan, I'm a remodeling contractor in Tahoe City and we do a lot of work in Tahoe Donner as well. In the past we owned a condo along Northwoods (2/2 with a garage). We rented that as a long term rental and had positive cash flow. Neighboring units were also 2/2s and some did STRs. The best times are around any holiday. Summer in TD can be just as lucrative as winter. The Tahoe Donner amenities are great. If you are able to find a place near the Trout Creek Rec center, that can be a bonus for yourself and any potential renters. Additionally, TD has a marina on Donner Lake that sees a ton of use in the summer. TD also runs great summer camps for kids, so any renters can sign up for the week, drop their kids off and have the day to play themselves. There is a bit of a divide on the feelings around here with STRs, as many long term rentals are being converted to STRs and the area is loosing some workforce housing. I know Truckee and TD recently added or changed some local ordinances and rules. It's bound to be on their website, or just call TD Member services.
The codes around ADUs are changing, so maybe you can find a house with a detached garage and build up an ADU above or below it. Then you could have a short term rental along with a $1,200 long term rental. There are a number of those around.
As for other locations- Squaw/Alpine, Northstar, or Tahoe City. All worth a look.
Do note that the current costs to build a new house in the area, if designed well, can be lower than buying an existing house (especially if you need to remodel it). I am seeing a lot of crappy houses selling for well over $400/sf. Then going right into a $400/sf remodel.
Also recognize that the types of renters in South LT are going to be different than the renters in Truckee, North LT. While this is a total generalization, South LT renters will usually be visiting the casinos and enjoying the nightlife. There is barely anything to do in North LT or Truckee after 9. So these areas seem to get more people that ski, bike& hike all day- head out to dinner then come back to rest up for the next day.
Thanks a lot Matt, this is super helpful. I am looking at TD as I want to enjoy the place for my family for a few times a year, too! But I can't afford to have it without rental income so STR can help me to have both.
Loving this thread, and thanks for the advice. I’ve been taking my daughter to King’s Beach and/or Incline Village the last few winters whenever there’s a nice snow storm.
I’ve considered buying a small condo in King’s Beach but never thought to look in Truckee.
@Shan Dey Tahoe Donner does well in the Summer as well due to all the amenities the HOA offers. I will say this, North Lake and TD do not generate the revenue that South Lake does however (similar occupancy rates but lower ADRs). But, North Lake and TD also generate a lot less headaches because there are less bachelor parties and 'casino visitors' using the properties. North Lake and TD are much more family oriented (in my experience at least).
Hey Saj- Your idea of a small condo in the KB area is a good one! Kings Beach is really turning things around. It sure used to be the ghetto of the lake, but there has been major redevelopment in the area and it's become a great location. I have remodeled in many different condo associations around Kings Beach and Tahoe Vista and there are some real gems. Rentals fill up quick too. Many of the KB locations have the same repeat renters every year. Definitely worth keeping your eye on it.
Hi @Andrew DeLorenzo. Below is the new proposal for STRs in Truckee. As of right now, they are not issuing any new permits. And the proposed plan below will start the middle of June.
Cap STR registration certificates town-wide at the 1255.
Phase out STRs in both multi-family units and Accessory Dwelling Units. This means that no new registration certificates will be issued for these types of units
One year waiting period after a property sells before it is eligible to register as an STR.
Increase penalties for violations. Add new fee for inspections following a citation.
Establish a December 31 deadline for annual permit renewal to facilitate management of the waitlist.
Conduct a review of the STR program in summer 2023 and bi-annually after that.
Develop incentive program guidelines for a new STR registration certificate-based Workforce Housing Advancement Program to incentivize new workforce housing.
I am a realtor in the area and know what's going on real time. Let me know if you have any additional followup questions or want to jump on a call.
@Lindsay Buchanan, I've got whiplash from the speed of that response, very helpful.
Sounds like AHJ is closing the door on STRs and opening a window to incentivize investors to come up with a solution to the workforce housing problem. Has there been any elaboration on the incentive program?
@Andrew DeLorenzo I have not seen anything yet. When I see more information, I will be sure to pass it along!
Any news on “workforce” housing and what does this even mean ? Anyone with a job that needs housing ?
I have been getting bookings for "workforce" housing in my STR in Lake County, not sure on Truckee. These are temporary workers like traveling nurse, doctors, solar installers, PG&E workers etc etc. These are normally booked by the company representatives for workers.