11 Tips for success in a well-regulated Los Angeles Short Term Rental Market

The supply of short term rental homes in Los Angeles has steadily increased over the past 10 years, even with the well-regulated and good intentioned rules set forth by Los Angeles.  Collectively, the city is figuring out how short term rentals can coexist within the community, and make it possible for property owners to monetize their home when they are not in town.

The short term rental regulations are best suited for people who wish to spend 6 months out of the year in Los Angeles, and monetize their home when they are away.

Luckily, there is another great option for homeowners to cater to groups of travelers who are looking to stay for extended periods of time.  Open Air Homes specializes in homes that are available for 31+ day stays, and a number of our homeowners are monetizing their investment property exclusively to guests who are looking for longer stays, yet do not want to sign a year lease.

Here are 11 tips to think about when considering purchasing an investment property in Los Angeles and renting it out, either short term or medium term:

1. Decide if short term rentals are right for you.  

The application process for short term rentals in Los Angeles is fairly easy as a homeowner with 3 forms of proof that you own the property and wish to rent it out for six months a year, and live in the home as your primary residence the other 6 months.

This HSR permit gives you the ability to rent out your home as a short term rental for 120 days out of the year.  This permit is also required to post your home on sites like Airbnb and VRBO.

With the changes to the regulations in Los Angeles, the supply of short term rentals dwindled, so at the time of this blog post, we are seeing high demand for our homes with a short term rental permit.

As a short term rental, you will want to alert all of your guests of the regulations around short term rentals in Los Angeles so that you can rest assured that your home doesn’t become a nuisance for the neighborhood.  Sites like Airbnb have come a long way since their inception to crack down on party homes, and if you do decide to go this route, you will want to work closely with your property manager to ensure that your neighbors concerns are listened to and respected.

If the risk profile of short term rentals is too high for you and your home, you may want to consider 31+ day extended rentals.

2. Decide if medium term rentals are the choice right for you. 

Working Space at Thoughtful Design -Charming WFH Beach Bungalow

A number of the homes that we manage and rent out through Open Air Homes are exclusively 31+ day rentals.  This has proven to be a great solution for homeowners who do not wish to have their investment property listed as their primary residence, and fortunately, this segment of longer-stay travelers is a growing one.

When choosing to go the medium-term route, we design and cater these homes to digital nomads who can work from anywhere.  Our guests often want to live the bi-coastal lifestyle or examine if moving to Los Angeles full time is the right decision for them.  They will often “test” different communities within Los Angeles and jump from home to home until they find the right fit.  They are often also looking to purchase, and we can take the stress out of relocation by providing them a comfortable home while they house hunt.  And lastly, a lot of locals appreciate these extended stay rentals when their home is forced into major renovation due to a flood or fire.

3. If you decide extended stays are for you, make sure your property manager has a Real Estate Brokerage license (with a DRE number), and has all guests over 31 days sign a CAR form.  

We feel that it’s important to note that all 31+ day rentals legally are required to be handled by a real estate brokerage with a DRE number.  If your property manager is taking 31+ day rentals without a brokerage license, the guest has not signed the proper CAR forms to protect you as an owner.

When a guest stays for over 31 days in the State of California, they switch from being a guest to a tenant, and have tenant rights. In the rare case where you’d have to evict a tenant, you will want to make certain that your 31+ day guest has signed a CAR form.

Most property managers who list homes for 31+ day stays on sites like Airbnb in Los Angeles do not have a Brokerage license, and you are putting yourself at risk by taking these rentals without a CAR form.

Our DRE Number (DRE #02164159) is on our website, all 31+ day guests sign a CAR form and we follow the letter of the law.  This extra step protects our homeowners and their assets.

4. Design dictates the type of renters you will attract.  Design your home to cater to families and work-from-anywhere guests, not party groups. 

Living room at Thoughtful Design – Architectural Digest home

Party groups are an inevitable part of the hospitality industry, but through the right type of home design, you can appeal to the type of guests who, on average, treat your home with more care. Catering to families and work-from-anywhere guests should be at the top of your mind.

Put yourself in the shoes of a Mom planning her family’s vacation.  She imagines a vacation where her kids will sit around and play board games, grab tennis rackets or a basketball to have a healthy competition, and play for hours in the pool.  She also is looking for TVs in the rooms so her kids escape.   She is in charge of planning an unforgettable experience for the family, and if you can find ways to appeal to this type of traveler, you will have success.

Digital nomads are a growing population of people who can work from anywhere.  They want fast and reliable wifi, desk or dining table space to work, and comfortable furnishings throughout.

We often partner with design firm Interior Particulier, knowing not only for their residential work, but also for designing some of the most sought-after homes in Southern California.

5. Make the search engine algorithms your best friend.  A higher view count will lead to more bookings. 

Indoor outdoor living at Thoughtful Design – Architectural Masterpiece

The Short term rental industry is getting more competitive than ever.  If your home is consistently on page 3 or more of the search results, your chances of high occupancy will go down.

The algorithms of Airbnb, VRBO and others take into consideration a number of factors: Number of photos (at least 30), response time to inquiries, wishlist saves, dwell time on your listing (the time a guest spends looking at your listing), and a variety of other measurements (reach out if you want to discuss further).

Make the algorithm your best friend by keeping your calendar accurate, accepting vetted guests who inquire in a time efficient manner, and not canceling bookings.

6. Think about Desirability above all else. 

Infrared Sauna at Thoughtful Design – Architectural Digest Home

The most viewed home on our platform has a chicken coop in the backyard that delivers fresh eggs every morning to our guests.  Potential guests continually add this home to their “wishlist” to book and share the home with others, increasing the placement it receives on sites like Airbnb and VRBO.

And our San juan home for example has an infrared sauna, which is a huge selling point for guests looking to incorporate wellness to their stay

How can you make your home stand out above other homes in a crowded space?  Think outside the box to find unique ways to increase desirability from the type of renters you want to attract.

Minut sensor for noise and occupancy monitoring

7. Install Minut devices 

You might be wondering how you can monitor noise levels or prevent parties  from guests while you’re away from your home? Wire-tapping is illegal, yet noise monitoring devices (we recommend Minut) can alert us if a group is breaking the rules, and we can step in before your neighbor notices.

With Minut, you can get real time detection of noise above the threshold you set and other important functions it has to ensure your guests are not a bother to your neighbors.

In Los Angeles, the city has a 10pm curfew for all amplifying music.  They also restrict the congregation of more than 8 people in short term rentals at night.  Make sure to alert all guests to the regulations in Los Angeles, both to protect our community and to ensure you can continue renting your home when you’re not in residence.

8. Make your primary bedroom a sanctuary!

More often than not, the person paying for the vacation will be sleeping in the primary bedroom.  Make this your focus by designing a comfortable space for the person footing the bill.   We recommend making all bedrooms a sanctuary, but if you had to choose one to have stand-out, make it the primary.

We cannot reiterate enough how important having a comfortable bedroom is. Getting a good night sleep will ensure having well rested guests, well rested guests are typically happier. We have put together a blog on the Best Bedding Pieces for your Short Term Rental Property with pieces that have been working for us over the years and keep guests coming back!

9. Make your neighbors your allies.

When we sign a new home in Los Angeles, ,we introduce ourselves to all the neighbors and give them our texting line to reach out if there are any issues with the guests at the home. We are in direct communication with a number of neighbors in Los Angeles and elsewhere, and we treat them as partners for success.

We find this to be a better solution rather than the neighbors escalating issues with local authorities and putting your short term rental under risk of losing its license. Property Managers ought to come out of the shadows and introduce ourselves, so we can continue to find ways to mitigate noise and parties, and find the right balance between long term community members and shorter term guests.

10. Make sure your property manager has a direct-booking channel for repeat guests, and ask if they are investing marketing dollars to prioritize direct bookings. 

Our homeowners make the most money when guests book directly through Open Air Homes.  Guests also pay the lowest rate anywhere, similar to the way most boutique hotels work.

Ask your Property Manager if they are investing in Google, Instagram or Tiktok ads to increase direct bookings.

Open Air Homes aims to have 50% of our bookings be direct in 5 years.  We have been building a client base of travelers for the past 9 years, and have invested in our direct booking experience to ensure we can stay ahead of the competition.

11. Consider making a major change if your listing has below a 4.3 Star rating.

If your home has below a 4.3 star average and a number of reviews, digging out of that hole to stand out online will be a challenge.  Read the reviews, see how you can improve your home, and re-launch your listing from scratch having learned all of the lessons that lead to low reviews in the first place.

As a design-driven company, Open Air Homes can help set your home apart and cater to the right clientele.  Finding the right company to partner with is essential to ensure that guests are happy in a well-maintained home, as well as properly vetted to both protect your asset and ensure the community is comfortable with your decision to rent.

We hope you enjoy these tips and if this blog is the sign you were looking for to make changes to your short term rental property please reach out.