Real estate investors are always searching for a new, profitable, investment location. This is why we are recommending Airbnb Palm Springs.
Table of Contents
- Should You Invest in Palm Springs, CA?
- Why Is Palm Springs a Desirable Location for Airbnb Investment?
- How to Find Airbnb Properties in Palm Springs
- Verdict: Should You Invest in Palm Springs?
The California real estate market is always a great location when considering a new Airbnb investment. People are attracted to the state year-round to experience its sunny weather and lavish attractions. These desirable qualities contribute to the success of California’s vacation rental properties.
In this article, we look at the attractions, as well as the data, that makes the Palm Springs Airbnb market so desirable.
Should You Invest in Palm Springs, CA?
Despite how popular you think a location is, the data is always the best way to determine how profitable an area is. Below is Mashvisor’s latest city-level data for Palm Springs:
- Number of Airbnb Listings: 640
- Monthly Airbnb Rental Income: $5,079
- Airbnb Cash on Cash Return: 2.74%
- Airbnb Cap Rate: 2.78%
- Airbnb Daily Rate: $367
- Airbnb Occupancy Rate: 64%
- Number of Listings for Sale: 205
- Median Property Price: $1,185,184
- Average Price per Square Foot: $509
- Days on Market: 50
- Walk Score: 59
As per the data above, we can see that Airbnb Palm Springs is looking like a great area to invest in this year.
The best metrics to look at when trying to figure out where to invest are the cash on cash return and the Airbnb occupancy rate. As we can see from our city-level data above, the cash on cash return for Palm Springs is 2.74%. This means it is likely you will generate moderate returns on your Airbnb Palm Springs investment.
Learn More: How to Evaluate an Airbnb Investment
Additionally, the Airbnb occupancy rate is 64%, which is considered a high percentage in the vacation rental market. This means it is expected your Airbnb Palm Springs will be highly desired and have requests for bookings around two-thirds of each month.
Other important data to consider when determining if you should invest in a certain location are the rental income and the cap rate. In terms of Palm Springs, there is a pretty high Airbnb rental income at $5,079. This means you will be generating a positive cash flow from a vacation rental property in this area.
Lastly, Palm Springs’s cap rate is 2.78%, meaning it has a fairly good market value. This means your Airbnb property will be desirable in the California housing market.
What Licenses and Certificates You Need for an Airbnb in Palm Springs
When looking to invest in any location, it is essential to do your research as to what licenses you need to obtain before listing your property. It is likely you will need to consider both city and state requirements. Below are some essential regulations to follow when listing an Airbnb Palm Springs property.
Vacation Rental/Homeshare Registration Certificate
One of the first licenses needed to operate an Airbnb rental property is a Vacation Rental/Homeshare Registration Certificate. This is required by the short-term residential rental ordinance in Palm Springs. This certificate essentially registers your Airbnb rental property with the city, making it legal to operate.
Transient Occupancy Tax Permit
Next, you will need a Transient Occupancy Tax permit. This permit is also required by the Palm Springs rental ordinance. You will have to apply for this permit and get approved by the city. Then you have to report back to the city each month and pay the required taxes to operate your Airbnb. This permit is required for all short-term rentals including hotels, inns, and vacation homes.
This fee is new to Palm Springs CA as of July 2021, so it may be surprising to some Airbnb owners. This requires all vacation Airbnb properties to pay a 1% TIBID assessment on any short-term rental property where the homeowner resides for less than a month, or 28 days, long.
Like any state, there are certain safety standards that need to be put in place on your Airbnb property. Palm Springs Airbnb requires a safety evaluation that will take place during your application for a Vacation Rental/Homeshare Registration Certificate. Additionally, this inspection will occur every time you renew your application.
Visit the city’s local website to view the Safety Inspection Form to know what to expect during the visit.
Other Things to Consider
Aside from licenses and permits, there are a few other standards to consider for your Airbnb Palm Springs. To start, the city only recognizes and approves two types of vacation rental properties:
- Any property that is available for 28 days or less with no owner present on the property during the time of the stay
- Any property with more than a single bedroom, that is available for less than 28 days, and the owner is present during the duration of the stay
If you attempt to list any property that does not fit into these regulations, you are subject to a $5,000 fine, as well as permanently being ineligible to operate an Airbnb in Palm Springs afterwords.
Additionally, there are rules as to how many people can be inside the property. Each bedroom has a limit of 2 adults and 1 vehicle. For example, if your Airbnb Palm Springs has 2 bedrooms, that means only 4 adults total and 2 vehicles can stay on the property.
When investing in any location, it is important to do your own research or reach out to a local representative who is familiar with the local housing market to ensure you are following all of the rules.
It is also always a smart idea to reach out to a local real estate agent to talk to them about anything that isn’t as commonly known about the vacation rental market in that area. Typically, agents who are licensed in that location will have answers to any questions you may have about investing there. Use our Real Estate Agent Directory to find an agent in Palm Springs.
Why Is Palm Springs a Desirable Location for Airbnb Investment?
As we saw above, the data for the Palm Springs real estate market looks promising. But what makes it a good location to invest in? What brings people to Palm Springs?
There are many different qualities and amenities that draw people to Palm Springs. To start, the weather in California is warm year-round. This means at any time of the year, people looking to enjoy the sunny weather will consider traveling to the area. The city offers plenty of places to swim as well as golf courses for visitors to take advantage of.
Palm Springs is also known as a destination for celebrities. That means the area is full of different places to shop, high-scale restaurants, and sightseeing attractions. There is something for everyone to enjoy in Palm Springs.
Additionally, this location is home to many of California’s natural hot springs. This is an amenity people of all ages can enjoy and experience year-round.
Lastly, Palm Springs is located right near Joshua Tree National Park. This would make it a desirable place to stay for visitors looking to visit the park. It is also a short drive from another major city, San Bernardino. People staying in Palm Springs can be right in the middle of some of California’s major cities and attractions.
How to Find Airbnb Properties in Palm Springs
This is such an easy tool for anyone to use. You simply type in any city in America, along with your preferences on a property, and the tool shows you the most profitable investments in that area. Below are some of the filters you can use to sort through listings:
- Location (you can search multiple cities at once)
- Property Type
- Rental Strategy
- Number of Bedrooms
- Number of Bathrooms
Which Neighborhood in Palm Springs Should You Invest?
Though Airbnb Palm Springs overall is a profitable area to invest in, you may not know which neighborhood you want to focus on. To explore the best Airbnb locations, use our Real Estate Heatmap tool. This lets you discover the top rental markets in any city across the United States.
To determine which locations are worth investing in, the Heatmap tool conducts a neighborhood analysis to zero in on the most profitable areas. We use important real estate metrics such as Airbnb rental income, cash on cash return, and Airbnb occupancy rate to direct you to the best areas.
What Are Some Other Helpful Tools That Mashvisor Offers?
We offer more than just the two tools mentioned above to help you with your real estate investments. After you have found a neighborhood for your Airbnb Palm Springs, as well as a potential property to purchase, you may want to check how profitable that property can be.
Investment Property Calculator
To check how successful your short-term rental will be, use our Investment Property Calculator. This tool was created for you to determine how much income your vacation rental can generate. We use the most recent trends and data to ensure we provide you with accurate predictions.
To use our Airbnb Calculator to check your California investment property, just plug in your property information and our tool does the rest. We run an analysis and provide you with data relative to your property. First, we show you estimated costs such as:
- Property Tax
- Interest Rates
After we show you your estimated costs regarding your investment property, we then offer a comprehensive rental strategy comparison. This is so you can see how your property would perform as a traditional rental property vs an Airbnb vacation home. To determine which would be more lucrative, we offer a comparison of real estate metrics like:
- Cash on Cash Return
- Cap Rate
- Rental Income
- Cash Flow
- Airbnb Occupancy Rate
This data is essential when trying to figure out how well your property will perform, and if it will create a good return on investment.
Real Estate Agent Directory
After you have zeroed in on a short-term rental worth investing in, it is time to purchase that property and begin your investment journey. We always recommend working with an agent, because not only can they get you the best deal, but they can also help you with any questions you may have.
If you are looking to buy a property in an area you are not familiar with, you may not know an agent licensed to work there. Use our Real Estate Agent Directory to locate agents anywhere in the U.S.
You can search your desired area and we will show you available agents in that location to work with. Then, you can scroll through different profiles to see who would seem like a good fit. Below are some of the information we provide to help your agent search:
- Contact Info
- Their Website
- Areas Licensed in
- Active Listings
Verdict: Should You Invest in Palm Springs?
If you are searching for a new area to invest in this year, consider a short-term rental property in Palm Springs. This area can be extremely profitable as tourists are looking to visit California year-round. The warm weather and the luxurious atmosphere of Palm Springs will keep an Airbnb occupied throughout the year.
The city-level data helps to show the potential of Airbnb Palm Springs. High cash on cash return and occupancy rate predict your vacation rental will generate a positive cash flow and attract guests all year.
If you are looking for tips on how to invest in real estate in 2022, visit Mashvisor for plenty of tools and services to ensure you are making smart investment decisions. Our tools mentioned above help investors feel confident in their property. We gather data only from reliable sources such as the MLS to conduct your real estate analysis.
Lastly, always do your own research before investing in any area to make sure you are following all of the city guidelines. To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.