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Palm-Springs-Short-Term-Vacation-Rental-Condo

Buying A Palm Springs Short-Term Vacation Rental Condo

Are you thinking about buying a Palm Springs short-term vacation rental condo?  There are a handful of condominium HOA’s in Palm Springs and the Coachella Valley that allow short-term vacation rentals less than 30 days, ranging from no minimum rental days to two weeks.  Most HOA’s only allow rentals 30 days or longer.

If your goal is to short-term vacation rent your Palm Springs condo to off-set some of the ownership expenses, there are several factors to consider.

Purchasing – Cash or Financing?

Are you paying cash or planning on financing your Palm Springs short-term vacation rental condo?  If you are financing, be sure to get pre-approved before you start your search for your Palm Springs vacation rental condo.   It is important to discuss your objectives with both your realtor and lender. 

Some Palm Springs condos that allow short-term vacation rentals less than 30 days do not qualify for traditional financing per Fannie Mae and Freddie Mac’s underwriting guidelines.   You would need a non-qualifying (Non-QM) mortgage or non-conventional mortgage with a higher down payment and a higher interest rate.  Be sure to ask your lender for an updated list. 

Your Palm Springs Short-Term Vacation Condo Rental Budget

Whether paying cash or getting a mortgage for your Palm Springs short-term vacation rental, be sure to research your budget carefully to determine your rental income and expenses.  You should also consult a tax professional to review business tax deductions.  Here are some of the budget items to consider:

  • $500,000 Condo Purchase Price

  • $400,000 Loan

  • $100,000 20% deposit

  • 30-year fixed at 4% interest

  • $22,920/year mortgage or $1,910 monthly payment

  • $6,250/year or $521/month for real estate taxes

  • $1,750/year or $147/month for homeowner’s insurance

  • $6,000/year or $500/month HOA fee

  • $3,000/year or $250/month land lease fee is applicable

  • $900/year or $75/month internet/cable

Be sure to also budget for utilities for gas, electricity, water (if separately metered), repairs such as HVAC, improvements, local hotel occupancy taxes (usually paid to you by the tenant then you pay the city), housekeeping fees (typically paid by the tenant) rental and property management fees and future HOA increases.

How Much Can I Rent My Short-Term Palm Springs Vacation Condo Rental For?

As part of your research, be sure to do your due diligence on the rental rates for your Palm Springs  short-term vacation rental condo.   A good place to start is looking at VRBO and AirBnb to see what other Palm Springs condominium vacation rental units are charging in the HOA you are interested in.

The peak Palm Springs short-term vacation rental condo market months are January, February and March with April (Coachella and Stage Coach music festivals), November and December as bonus months. There are also opportunities to rent during the summer but usually at a discounted rate.

During the off-season months, you might also want to consider monthly rentals for traveling medical professionals who rent for 30-60-90 days on sites liked FurnishedFinder.

Due Diligence During Escrow

Be sure to do your due diligence after opening escrow on the your Palm Springs short-term vacation rental condo. You will want to:

  • Thoroughly read all HOA CC&Rs and Rules & Regulations
  • Review all the HOA minutes and financials
  • Call the property manager with any questions you have about renting the unit – ask if there has been any discussion about changing the rental policy.
  • Review the HOA with both your lender and insurance agent
  • If the condo is currently a short-term vacation rental, be sure to verify it is in good standing with the local municipality.

 

Questions about finding and buying your Palm Springs short-term vacation rental condo? Contact Kevin.

What is the best city in the Coachella Valley to own a Short-Term Vacation Rental?

As as investor evaluates a potential location, it is important to review and understand the local laws, required permits, taxes and amenities of a city for a short-term vacation rental investment property in the Coachella Valley (Palm Springs area) and Joshua Tree, Pioneertown and Yucca Valley or up in the mountains in Idyllwild.   

Some areas such as Bermuda Dunes, Joshua Tree and Pioneertown area in the High Desert and Idyllwild in the mountains are governed by the local county government. 

If an investor is buying in an HOA community, it is very important to review the CCR’s and Rules & Regulations for potential restrictions.

Short-Term Vacation Rental Guidelines by City

CityShort-Term Rentals Permitted?Other Info
Palm SpringsYes11/11/22 - The Desert-Sun reported that the Palm Springs City Council voted 4-0 in favor of the new short-term vacation rental rules. Councilmember Christy Holstege was absent from the meeting. The major changes are: Capping rentals at 20% of the homes in a neighborhood; Reducing the number of times a home can be rented per year from 36 to 26, a change that will be effective immediately for new applicants but not until Jan. 1, 2026, for holders of existing permits; Allow full-time residents to rent their homes occasionally using a "junior permit" that allows up to six rentals a year. It won't be subject to the 20% neighborhood cap; Final adoption is scheduled to happen after a second vote at the next council meeting Nov. 29.
Cathedral CityNo, except a few select HOAs.2/2/2022 Cathedral City will no longer issue permits for short-term vacation rentals in single-family and multi-family residential zones. The city is phasing out short-term vacation rentals by 2023, due to an ordinance that was approved in 2020 and went into effect on March 18, 2021, after a referendum. Short-term rentals are still allowed at a select few HOA's.
Rancho MirageNoOn October 21, 2021, the Rancho Mirage City Council adopted Short-Term Rental (“STR”) Ordinance 1189 which prohibits short-term rental activity in all zones of the City, and on November 20, 2021 the Ordinance went into effect.
Palm DesertNo except certain zoned areas.STRs are prohibited within the R1 and R2 zones, excluding On-Site Owner STR Permits.
La QuintaMoratorium on new permits.In November 2022, La Quinta residents will vote to eliminate short-term vacation rentals in residential neighborhoods by Dec. 31, 2024, allowing them only in home shares – where the property owner remains on site throughout the rental – and in designated areas, such as those zoned tourist commercial.
Indian WellsNo except limited exceptions.Around the PNB Paribas tennis tournament in March, certain permitted/ licensed STRs are allowed a 7-night minimum.
IndioYesIndio Short-Term Rental Ordinance Code
City of CoachellaYesCity of Coachella Short-Term Rental Ordinance Code
Bermuda DunesYesUnincorporated Bermuda Dunes is regulated by the County of Riverside. The Bermuda Dunes Country Club HOA does not allow short-term rentals.
Desert Hot SpringsYes7/5/2022 Owners of short-term vacation rentals in Desert Hot Springs will have to follow new rules, including noise limits, under an ordinance tentatively approved Tuesday by the city council.
Joshua Tree & Pioneertown AreaYes
Yucca ValleyYesThe Town of Yucca Valley currently regulates short-term vacation rentals.
IdyllwildYesIdyllwild is regulated by the County of Riverside.

Information updated as of November 2022 and is subject to change. 

For additional information, please click on each city above to review the specific short-term vacation rental requirements including:

  • Permit fees and Transient Occupancy Tax rates (TOT)
  • Landlord to keep records of all stays for taxes, business licenses and safety purposes.
  • Tenants must receive a copy of the “good neighbor” brochure from the Landlord that outlines the rules for renters.
  • If the rental is located in a community’s homeowner association (HOA), some cities may require an approval letter from the  HOA.

PALM SPRINGS SHORT-TERM VACATION RENTAL CONDOS FOR SALE*

*Subject to verification of the the HOA’s CC&Rs and Rules & Regulations that allow short-term vacation rentals less than 30 days.

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88 Matches Found
New Listing $563,000
371 Muirfield Drive, Palm Desert, CA
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3BD 3BA 1814SF
Last Modified: 5:14pm, December 4, 2022
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$399,900
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2BD 3BA 1555SF
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2BD 2BA 1360SF
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29679 W Laguna Drive, Cathedral City, CA
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2BD 2BA 984SF
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$525,000
279 Vista Royale Circle E, Palm Desert, CA
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2BD 2BA 1360SF
Last Modified: 7:44am, December 4, 2022
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$559,000
67633 S Laguna Drive, Cathedral City, CA
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2BD 3BA 1525SF
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Listing Office: Holly's Homes Desert Princess, Inc.
$589,900
67576 S Laguna Drive, Cathedral City, CA
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3BD 3BA 1708SF
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Listing Office: Holly's Homes Desert Princess, Inc.
$549,000
29899 W Laguna Drive, Cathedral City, CA
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2BD 3BA 1525SF
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Listing Office: Holly's Homes Desert Princess, Inc.
Open House $555,000
29525 Sandy Court, Cathedral City, CA
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2BD 3BA 1676SF
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Listing Office: Holly's Homes Desert Princess, Inc.
$799,000
76222 Sweet Pea Way, Palm Desert, CA
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3BD 3BA 2198SF
Last Modified: 7:44am, December 4, 2022
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443 Desert Falls Drive N, Palm Desert, CA
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3BD 3BA 1814SF
Last Modified: 7:44am, December 4, 2022
Listing Office: Bennion Deville Homes
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216 Desert Falls Drive E, Palm Desert, CA
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2BD 2BA 1330SF
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3BD 2BA 1465SF
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$495,000
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3BD 3BA 1434SF
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2BD 2BA 1092SF
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$950,000
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3BD 3BA 1918SF
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Listing Office: Windermere Desert Properties
$542,000
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2BD 2BA 1549SF
Last Modified: 9:43am, December 3, 2022
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$812,000
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3BD 2BA 2177SF
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$429,000
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Listing Office: KELLER WILLIAMS RIVERSIDE CENT
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