Vacation Rentals in West Sacramento

11 Replies

City of Sacramento has very defined regulations surrounding the use of short-term vacation rentals ( airbnb ). 

https://www.airbnb.com/help/article/1248/sacrament...

However, these rules/regulations do not apply outside of the city limits. Does anyone have experience with airbnb in West Sacramento?

If so, are there any regulations to be aware of before doing so? I am considering using airbnb instead of long term tenants as part of a BRRRR strategy.

West Sacramento is actually in Yolo County and other than the name, is not associated with the City of Sacramento or Sacramento County. 

Here's a link to the West Sacramento Municipal Code where those regulations, if any, would be located: https://qcode.us/codes/westsacramento/

I just flipped a house in west sac and had considered Airbnb and renting it out before deciding to sell. I think Airbnb is only viable close to the ball park or near the bridge to downtown. It is definitely a formerly tough neighborhood that is well on its way to being revitalized. But it still has lingering problems related to its past. Long term rentals are a good option in the other areas and I feel West Sacramento will appreciate faster than the neighborhoods around it due to the revitalization of new construction and proximity to downtown.

Thanks @Tobias Falzone and @Embert Madison jr for the info and replies.

@Tobias Falzone can you expound on the lingering problems you see in W Sac? I have heard similar sentiments expressed by friends and family in the area.

Hi, I am currently in the market looking for a investment property that i can rent and generate good cash flow as well as long term growth.  considering two areas 1. Natomas 2. West sac

can anyone help me with pros and cons of both the areas. Natomas might have similar revitalization one day assuming some big employer like centene would establish its presence in the big vacant land in the middle of Natomas owned by arena. 

considering this would it make sense to buy a house there ? vs. west sacramento ?

@Zach Thomas - I don't mean to paint the area in broad strokes, as the trajectory of the area is very good overall.  My comments focus on the area west of downtown sacramento, not the new developments further south  But like in all transitioning neighborhoods, change is never homogenous.  You see run down and neglected properties/businesses right next to nice higher end developments, which creates an odd neighborhood feel.  The commercial businesses in the area are also set up for a lower end clientele, though that is changing.  A large check cashing/payday loan shop just went out of business near the house I flipped.  I see that as a very good sign, but it will take time for the commercial base to turn over and renovate to catch up to the neighborhood.  I talk with the neighbors and they always note how much the neighborhood has changed, how people feel safe taking dogs on walks and strolling even in the evening.

However, you will see an unusual number of homeless folks meandering around the area of west sac directly west of the river.  Many are the type that don't appear dangerous: recycling collectors and the like.  But they are pervasive, numerous, and noticeable.  There is dumping of sofas and old tvs on the side of the roads, especially around the apartment complexes and in the industrial area.  Crime has gone down, but there is still quite a bit of it.  The older residents are used to being on guard in that way, but stigma usually lags reality in transitional neighborhoods.  Many homes have bars on windows.  I do not feel they are warranted anymore and removed them off my project.  

@Jaymin Jasoliya - I'm not convinced of appreciation potential in Natomas as much as I am in West Sacramento.  I think West Sac is already transitioning as a neighborhood, but if you are waiting for a large employer to move in and change the neighborhood in Natomas, then you are looking many more years down the road.  But either way, invest in flood insurance in both of those neighborhoods!

@Tobias Falzone thanks for sharing your view. I own my personal residence in west sacramento since last 3 years and i agree it is a transitioning neighborhood for sure.  any other area recommendations ?

@Tobias Falzone thank you for flushing out your perspective. That is helpful. Given yours and others input, it doesn't sound like airbnb is advisable at this point immediately west of the bridge in SFRs. Sounds like the higher end developments could work if (big IF) the HOAs are accommodating.

You bring up another point I have been curious about, flood insurance. In doing some reading I saw that Sacramento is the second most vulnerable city in America to flooding (first is New Orleans). That being said, do you typically buy flood insurance in the flood zone protected by the levee system? If so, how much do you typically allocate in your cashflow calc for this insurance?  Obviously an insurance agent can get you a quote for a specific property, but do you have a rule of thumb you use to account for this when doing analysis on several properties?

The FEMA maps show areas that would be affected by flooding if the levee system was to fail- it is almost ALL of the downtown/midtown/W Sac areas ( http://arcg.is/011y0a ). The levee system was built, to my knowledge, to withstand a 1% event (one hundred year flood). Seems like this type of weather event is not too hard to imagine (Oroville dam scare last year).

Any other ways you mitigate this risk besides buying flood insurance?

 @Zach Thomas , West Sacramento is seeing a lot of improvement recently but also has a certain stigma due to its past, which generally takes some time to get rid of.  The hottest areas today are ones that not long ago were the least desireable and the whole area can vary vastly from block to block.  You can have new luxury builds and only a couple blocks away have a homeless shelter and rehab house.  So you have to know the area well.  I haven't AirBnB'd anything in West Sac yet but do know there are a number of listings in the area and am in the process of figuring out myself how viable of an option it is.  

Regarding flood insurance, I live literally a block from the river and don't have flood insurance.  When we had the Oroville Dam scare in February, I decided to get a quote and was quoted somewhere around $600/year.  I didn't buy it because it would kick in after 30 days so we would have been out of the rainy season by then but might consider getting it.  We aren't considered to be in high risk due to the levee system but if the levees go, we will be swimming.  Aside from flood insurance, you can mitigate the risk by raising the building 5 ft ;).  You see quite a bit of older buildings 5 feet above ground.

@Jaymin Jasoliya , I agree with @Tobias Falzone that West Sac has a higher potential for appreciation, which can already be seen.  A lot is likely to change in the Bridge and Washington districts of West Sac, which are just north and south of the Tower Bridge.  The I St bridge project will better connect the Washington District with the Railyards area of downtown Sac, which is projected to expand quite a bit as well.  So there are definite plans for growth.

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