We have been thinking of purchasing a property either on Palm Spring, Big Bear Lake (Moonridge), or Lake Arrowhead.
Big bear lake seems to be our #1 choice since the city is more friendly towards STR. The homes in moonridge have increased significantly. Not sure what's going on there. but there have been multiple bidding wars going on in snatching almost every property lisitngs within the hour. We don't want to overspend money since our mainly interest is to gain high ROI. so we are cooling off the search for now.
Lake arrowhead is beautiful. However without lake rights, is it even worth it purchasing there? this will be our first purchase strictly for STR so we want to make sure the ROI will be the highest.
I'm aware that Palm Springs have many restrictions towards STR. plus many residents seem to want to ban STR. should we even consider the area then? any suggestions of other surrounding areas that we should even consider?
I used to own an airbnb rental in Orange County until the city pretty much shuts down all of us.
Real Estate Agent 路 San DIego 路 Member since 2019 路 177 posts 路 185 votes
5y
I can speak to Big Bear. We owned and visited Big Bear for many years, decades actually. We were in BBC, close to the airport and some restaurants, etc. There are many, many small cabins in that area that serve as vacation homes and STR. From BBC, Baldwin Lake or Moonridge, you can walk to the forest but not the ski slopes or downtown. Big Bear has always been a tourist area. Peak season is winter, but lack of snow can have a big negative draw on tourism, as people think skiing when they see the snowcapped peaks from home in downtown LA. There was something like 100% occupancy over Thanksgiving and the Christmas/New Year holiday, and, back then, a lot of vacancies in between.
Year round rentals don't have much demand and there's not a lot of employment unless you go "down the hill" for work. That's a 2-3 hour r/t commute, so most people don't do it. What's left are B & C type long term renters overall. Retirees buy there, tourists visit there, people own long term 2nd homes there, and a LOT of marginal people escape there.
If you're hands off, I'd say branch out to a place that isn't already overrun with STR and where the restrictions are lax or non-existent. Look for a niche. A nice property that stands out- hopefully due to location and a lovely setting. Decorate it beautifully, perhaps in theme, and stock the kitchen nicely. A little hole in the wall gem with a pretty view and a small town feel might do far better for you than being one of hundreds and a worn out STR welcome from the locals. If I were hooked on the Mt/desert regions of so Cal, I'd look slightly further afield. Joshua Tree, maybe. Pioneertown? Lucerne Valley? Spring Valley Lake on the backside? Pinon Hills up against the mountains? Idywilde? Julian? The old areas of La Quinta? I don't have a feel for these areas currently as STRs, but perhaps one of them might work for you. The price points are better and that will give you a little leeway with your cashflow while you build your business. You are building a business, hopefully with gushing reviews and repeat customers, but it all takes time.
Real Estate Agent 路 Boston, MA 路 Member since 2018 路 2k+ posts 路 1k+ votes
6y
Without knowing any of those towns .. I would suggest:
A metric you can try to evaluate is if it cash flow if you had to rent it to a long term tenant and how that equation looks. Additionally I would evaluate the growth and potential development indicators that might make one of those towns stand out more than the other. Lastly, I would stay within a STR city that is primarily driven by tourist income rather than an isolated small town that would be equipped with local laws limiting your STR rental ability.
I own 10 including in OC (legally by being grandfathered in). Both big bear and PS homes do great for me. We have never had a single complaint in PS because we are very strict on the rules with guests before they book. Either one is fine. We don鈥檛 know enough about lake arrowhead but the returns don鈥檛 look amazing so we have not purchased there.
Lake Arrowhead is a great location for your own vacation property. For STR it will be a lot for your renters to understand the very strict rules regarding the lake and shorelines. You will get lake rights with a developed property... but your renters must have a boat license issued by the ALA to operate it. Not difficult to get but kind of a chore for someone on vacation.
Also, the lake has public walking areas close to shoreline but are intermittently cutoff by private property. I believe you even have to register with the ALA if you plan on fishing off a dock or beach.
My parents lived in Lake Arrowhead for 20 years and I still felt very confused with the rules and etiquette if I went out of my normal areas for activities. Again, love the area and have great memories, but the homeowners are pretty protective to keep the lake private and wanted to share the input to hopefully help out. Good luck!
Thank you everyone for your inputs. we are for sure not doing lake arrowhead. Palm Springs & big bear might be the best contender as for now. Sorry I鈥檓 new at this site. I don鈥檛 know how to reply or even find my own discussions 馃槅
Thank you everyone for your inputs. we are for sure not doing lake arrowhead. Palm Springs & big bear might be the best contender as for now. Sorry I鈥檓 new at this site. I don鈥檛 know how to reply or even find my own discussions 馃槅
You might want to look at Crestline. It has the County owned Lake Gregory which is popular and open to anyone for swimming, fishing and non-motorized recreation. Lake Arrowhead is close enough for a drive to the village or a concert or Snow Valley for skiing.
I own 10 including in OC (legally by being grandfathered in). Both big bear and PS homes do great for me. We have never had a single complaint in PS because we are very strict on the rules with guests before they book. Either one is fine. We don鈥檛 know enough about lake arrowhead but the returns don鈥檛 look amazing so we have not purchased there.
How long and where is your Big Bear Home? We were in moonridge from 13-15 and only had 3 months positive cash flow those years.
I wouldn't describe Big Bear Lake as friendly towards STR, maybe less hostile. Better than SB County and I've heard even worse things about Palm Springs. We owned in Moonridge from 13-15. We bought as a second home so didn't really go into it with the right objectiveness for buying a STR, but only had a few months cash flow positive while we owned it.
I think if your focus is STR, looking between Summit and downtown would have better year round appeal to renters.
Thank you everyone for your inputs. we are for sure not doing lake arrowhead. Palm Springs & big bear might be the best contender as for now. Sorry I鈥檓 new at this site. I don鈥檛 know how to reply or even find my own discussions 馃槅
You might want to look at Crestline. It has the County owned Lake Gregory which is popular and open to anyone for swimming, fishing and non-motorized recreation. Lake Arrowhead is close enough for a drive to the village or a concert or Snow Valley for skiing.
Plus the houses are much lower in price.
Thank you for your comments. I鈥檓 a firm believer of location location location. It鈥檚 hard for to invest in an area that鈥檚 far from the main site. Unless I have lots of extra cash laying around then I will consider. As for now, Palm Springs have been my main focus
I wouldn't describe Big Bear Lake as friendly towards STR, maybe less hostile. Better than SB County and I've heard even worse things about Palm Springs. We owned in Moonridge from 13-15. We bought as a second home so didn't really go into it with the right objectiveness for buying a STR, but only had a few months cash flow positive while we owned it.
I think if your focus is STR, looking between Summit and downtown would have better year round appeal to renters.
Interesting! I understand the market in Palm Springs are volatile especially during COVID time. What I have seen lately is huge discounts on the homes there. That caught my interest. I鈥檓 keeping my option opens for SHort & long terms.
I鈥檓 surprised about Moonridge. We had a relative who owned a property there. She seems to be doing well or so she said. But again, it鈥檚 just one out of many. The selling markets were incredibly fast. Everyone seems to be snatching one of those cabins in big bear especially Moonridge area.
I own 10 including in OC (legally by being grandfathered in). Both big bear and PS homes do great for me. We have never had a single complaint in PS because we are very strict on the rules with guests before they book. Either one is fine. We don鈥檛 know enough about lake arrowhead but the returns don鈥檛 look amazing so we have not purchased there.
Where in Palm Springs? Do you any problems with city regulations at all? Did u do any long terms in any of your properties?
Absolutely! Palm Springs & big bear will be remote. I even considered international market. But that鈥檚 very tricky & complicated so it鈥檚 not my first choice
@Nadia O. our PS home is close to the airport but not too close. We have never had a noise complaint but we are super strict in the beginning with rules. We own 1 long term rental in Redlands.
Property Manager 路 National 路 Member since 2020 路 27 posts 路 8 votes
6y
@Nadia O. I manage VR in both Lk Arrowhead and BB. Generally, our homes in BB do better (more activities, 2 ski resorts, a public lake) than Lk Arrowhead (private lake and there is a vote this month to eliminate STR guest access to the lake). Big Bear Lake is incorporate and is a city with their own permit requirements and the rest of the mountain is unincorporate therefore falling under San Bernardino County requirements. I say spend a weekend in each location and see which one calls out to you!
Investor 路 Fontana, CA 路 Member since 2017 路 95 posts 路 59 votes
5y
Hello everyone, we are considering a STR in PS. We own and manage 1 STR in the Smoky Mountains and it has been phenomenal. We have several LTR in several states but we are wanting to supercharge our cashflow through STR. We live in Southern California.
Investor 路 Spokane, WA 路 Member since 2020 路 49 posts 路 15 votes
5y
Just in case anyone is interested, STR do really well in the Joshua Tree area (45 minutes from Palm Springs area in the high desert) due to the national park (millions of visitors a year, celebrities, etc). That's my hometown and my family has a successful real estate/property management out there so if anyone is interested, PM me and I can share contact info!
Rental Property Investor 路 La Quinta, CA 路 Member since 2018 路 263 posts 路 95 votes
5y
@Alex Sabio
The greater PS area is very popular for STR's with a lot of year round demand. Each city out in the desert has their own regulations and/or restrictions. Make sure your familiar with them. Happy to share any information if needed.
Lender 路 Washington DC 路 Member since 2015 路 2k+ posts 路 2k+ votes
5y
Besides Big Bear look at Idyllwild. Death Valley, Yucca Valley, Coachella, Indio might have income that spike in Fall and Winter. Look up City Planning meetings and see what's coming for any area. Neighbors don't like being next to the Animal House party pad and can shut you down
Big Bear City, CA 路 Member since 2017 路 9 posts 路 10 votes
5y
I live in Big Bear and have sold real estate up here for over 15 years. I think the STR will be better in Big Bear than Arrowhead mainly because of the ski resorts. You have to have lake rights to use Lake Arrowhead as well. For years, Arrowhead was known as being the more "exclusive" and expensive area. I think things have changed and Big Bear is more of a 4 season resort town. Summer and Winter are the busiest times, with fall and spring slowing down. This a good time to do some maintenance or use it yourself. This year is different though, the weekdays now are busy like normal weekends and weekends are busy like holidays. The difference in what you can buy a house in Big Bear is much lower than LA or Orange County and the STR's do really well. Moonridge or Big Bear Lake are the top areas that rent well.
I can't steer you in regards to Palm Springs, as it's our goal to own a STR there as well.
Rental Property Investor 路 Las Vegas, NV 路 Member since 2014 路 137 posts 路 118 votes
5y
Define what "We don't want to overspend money since our mainly interest is to gain high ROI." means to you? Cash flow? Appreciation?
I have looked very closely at 2 of the locations you are interested in, earlier this year - big bear and PS. I did not find "high ROI" with either unless willing to self-manage. Both locations have very high property manager (PM) costs that wipe out nearly all profit.
Also neither city is all that "friendly towards STR" unfortunately, as others have pointed out. PS bills itself as the most difficult town in the US for STR (the local Town admin for rentals told me that on the phone)- they have a nearly $1000 a year permit cost, capped number of nights you can rent (34 or 35 rental instances), someone has to be there to check-in guests, etc. Arduous, and that means a costly PM. There are several folks on this site that do well in the area, but typically outside PS, in palm desert or la quinta or elsewhere, and usually with bigger party/executive homes that can rent for big groups and big dollars, but then your up front costs are higher. I could not make the numbers work, I bid on a few properties in Feb, and glad I did not get into escrow before the pandemic. There are only a couple condo complexes that allow STR (most are monthly minimum), and one during the pandemic changed its HOA rules from 3-4 night minimums to 14 day minimums. The rules can always change, and often for the worse. I love PS but doubt I will ever consider an STR there anytime soon again.
BB is similar - yes STR are popular, yes the town is somewhat friendlier, but after doing research, including talking to a couple guys I met on this site, again I could not find a PM that was lower than 30-35% monthly fees, which eradicated all profit. I have no desire to self manage. Finding super reliable housekeeping and a local handyman (for weekly check-in/wellness visits, changing bulbs, replacing lost or stolen items, housekeepers do NOT do that stuff) is too risky unless you know a lot of people very well, built a team you trust. A first timer in the area likely needs to hire a real PM unless you live very close by. I was also looking in Moonridge, found a couple cute homes, decent priced (300-400k), but they would not gross enough to cover all the PM costs and make much profit to be worth while.
I am looking at other vacation areas instead of these.
