The Ultimate Guide to Buying a Palm Springs Vacation Home

Planning to buy a vacation property in Palm Springs, California? Here’s how to get the most out of your investment.

By: Brad Greiner, CEO of Open Air Homes and OpenAiRE Brokerage

January 20, 2023

Located in the heart of California’s Coachella Valley, Palm Springs is a popular destination for tourists from around the world. With sunny weather and stunning desert landscapes, it’s a top choice for vacationers looking to escape city life. Combined with its well-preserved midcentury modern architecture, a Palm Springs vacation home is a coveted investment property.

If you want to buy a vacation home in Palm Springs, you may be considering renting it out to offset costs of ownership. Before making this decision, it’s important to understand regulations and the pros and cons of owning a vacation rental in Palm Springs.

At Open Air Homes, we encourage our homeowner partners to use their vacation homes as much as possible. This gives our homes a competitive advantage over sterile investment properties designed solely to make money.

In this article, we will review the vacation rental regulations in Palm Springs. That way, you can make an informed decision about buying a vacation home in the city. We’ll also provide tips that help maximize returns on your investment – and avoid common pitfalls of owning a vacation rental.

Palm Springs Short-Term Rental Regulations

In Palm Springs, short-term rentals are any rental of a residential property for less than 30 days. Unlike some cities in the area, Palm Springs permits short-term rental in all residential areas. There are no restrictions on the number of units that can be available for rental.

Obtaining a Vacation Rental Registration Certificate in Palm Springs

One of the key regulations governing short-term rentals in Palm Springs is the requirement that hosts obtain a business license (Vacation Rental Registration Certificate) from the city. Here’s what to know about obtaining a vacation rental license in Palm Springs, California:

• To obtain a license, hosts must provide proof of insurance and pay a transient occupancy tax, which is currently 11%.
• Vacation rental hosts must display their business license number on any advertisements for their rental properties.
• If the home is in a neighborhood with a 20% or higher vacation rental to residential home percentage, its VRRC application will automatically be denied.
• Properties located within a Homeowner’s Association may register as vacation rental properties as long as they have an official statement of approval from the HOA.
• New applicants must submit a complete Vacation Rental Registration Certificate Application, along with a registration fee of $1,009 annually for short-term vacation rentals.

Open Air Homes has extensive experience navigating the Palm Springs vacation rental sector. Contact us for our team to handle all the necessary paperwork for your vacation rental property.

Noise Policies + Other Requirements

In addition to these requirements, the city of Palm Springs also has regulations to address potential nuisances and disruptions caused by short-term rentals:

• Hosts may not rent out properties subject to any outstanding code enforcement violations.
• Hosts must inform guests about the city’s noise and trash regulations. 
• Hosts must maintain a 24/7 hotline for neighbors to report any problems with the rental.

Advantages of Owning a Short-Term Rental Property in Palm Springs

Potential for high returns:

One of the major benefits of owning a vacation rental property in Palm Springs is the potential for high returns on investment. The city is a popular destination for tourists, and demand for short-term rentals is generally strong all year-round. With its beautiful weather, scenic views, and abundant recreational activities, Palm Springs is an attractive destination for vacationers, which translates to higher rental and occupancy rates for homeowners.

A straightforward licensing process:

Another advantage of owning a short-term rental property in Palm Springs is the relative ease of obtaining a business license. Unlike some other cities in the area, Palm Springs does not have any restrictions on the number of units that can be rented out in each area, which means homeowners have more flexibility in where they can rent out their properties.

Challenges of Operating a Short-Term Rental in Palm Springs

Competition:

One of the biggest challenges of owning a short-term rental property in Palm Springs is competition from other vacation rentals. With its popularity as a tourist destination, the city has many vacation rental properties. This can make it difficult for homeowners to stand out and attract guests. In order to be successful, homeowners will need to carefully market their properties and offer competitive rates and amenities to attract guests.

Fewer regulations:

Another potential issue is the lack of regulations governing the quality of short-term rental properties in Palm Springs. While the city has basic requirements for hosts – such as the need for a business license and insurance – there are no specific regulations regarding the property’s condition or amenities. This means homeowners must ensure their properties are well-maintained and equipped to provide a comfortable guest experience.

Residential neighbors:

There is always the potential for conflict with neighbors and community members who oppose short-term rentals. While Palm Springs has short-term rental regulations to address potential nuisances, homeowners may still face challenges from concerned neighbors.

The decision to buy a short-term rental property in Palm Springs is a complex one. By considering regulations, competition, and potential challenges of owning a vacation rental in Palm Springs, homeowners can decide whether this is the right investment for them.

Comprehensive Vacation Rental Management in Palm Springs 

Immerse yourself in the world of 5-star vacation homes. Open Air Homes provides full-service vacation rental management that helps create your Palm Springs dream vacation home. We handle licensing, paperwork, maintenance, design, and even marketing and photography.

Click here to partner with us and begin your journey as a Palm Springs vacation rental owner + host.