The sharing economy has presented travelers, homeowners, and investors alike with a number of new and exciting opportunities. Southern California and Los Angeles, in particular, has proven to be a valuable city for those already in or looking to get started in the short-term rental market. If you are looking to become a Los Angeles vacation rental host or investor, read on.
Tourism is at an all time high in Los Angeles, bringing in over 47.3 million visitors in 2016, a 4% increase over the previous year. 2017 shows no signs of slowing down for this hot destination. These statistics alone should be reason enough to look into becoming a part of what some like to call the “Airbnb Revolution.”
In Los Angeles the reasons why people turn to hosting a short-term rental are as diverse as the city itself. While you can’t really compare Venice to Downtown, there are a number of reasons why people decide to become Los Angeles Vacation Rental Owners/Hosts.
Here are profiles of a few owners we work with:
- Single mom or dad renting out the other side of a duplex as additional income to support the family.
- Musician(s) on tour.
- Director or other film industry executives working out of state.
- New grandparents that want to spend more time with their grandbaby on the East Coast.
- Investors wanting to retain the value of the home knowing that short-term rentals have less wear & tear on the space.
- Family home that the parent recently moved out of into assisted care and the family doesn’t know what the future holds for their properties.
- The family has grown & they need to move out to the ‘burbs but they want the flexibility to move back and forth.
- Individual or family inherited a vacation home and are looking to put the property to use for additional income.
This list grows everyday, and with good reason. Becoming a host not only gives you increased financial freedom, but the ability to offer unique experiences to your guests, a chance to share your passion.
The Hot Spots
Current trends suggest that Venice and West Hollywood are some of the hottest neighborhoods, but that is not to say that other parts of Los Angeles do not have a lot to offer your guests. Downtown is great to capture the convention crowd. We have seen an uptick of conventioneers bringing their families along for a work/play getaway – most of whom wouldn’t have done so crammed into a little hotel room. The amenities of a downtown loft or apartment are perfect for the entire family.
If you are looking to invest, pick a spot close to attractions like Universal Studios, the beach, and Beverly Hills. Hollywood, West Hollywood, and downtown are absolute no-brainers as well when it comes to starting a successful short-term rental business.. Keep in mind, some cities, like Santa Monica, do not permit rentals less than 30 days, so it’s always best to stay on top of your local laws.
Over the past couple of years, we have also seen an increase of hosts and travelers to places like Alhambra and Woodland Hills. More obscure parts of Los Angeles can do quite well, but are not necessarily hot spots for travelers.
Size Matters
Size does matter when it comes to occupancy. Smaller units, such as studios and one bedrooms, typically experience a higher occupancy year round, but at a lower nightly rate. Larger homes with three+ bedrooms, on average, experience a lower occupancy, although at a much higher rate.
Things to Consider
Before becoming a host, it is important to understand the business you are getting in to! It’s exciting, it’s fast-paced, and it can be very lucrative if managed properly. That being said, it is always a good idea to think about the following as you embark on this new journey.
- Just like other locations, the Los Angeles vacation rental market does have high and low seasons. They are not nearly as significant as say, a ski resort, but they do exist. The summer is considered peak season, but New Year’s 2016 saw record breaking numbers in tourists. Early Spring and late Fall tend to see a slight decrease.
- Across the market, supply is up and gone are the days of outfitting a place on a shoestring budget and expecting to get a ton of reservations. These days guests expect a little more. This industry certainly validates the saying- you have to spend a little to make a little, and potentially, a lot.
- Self- managing your property can become a full-time job. If you do not have the time to maintain, market, book, and clean your home, it is time to think vacation rental management company. (Wink, wink)
- Think about the overall experience you can offer your guests. This means everything from parking (yes, parking in LA can be awful), restaurants, BBQs, hot tubs, traffic, neighbors, and any other factors that can affect their stay, and ultimately, your business.
Overall, Los Angeles vacation rental market is a great place to open up shop as a short-term rental host. As tourism continues to grow, the opportunities for hosts open up. The great thing about LA is that there is something for everyone, and that includes the locals!
For more information about MyVRHost and opportunities in the Los Angeles market, click here.