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Should you invest in La Quinta vacation rentals?

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The world is opening up post-pandemic. As a property buyer and investor, you may ask, is it worth investing in a vacation rental during this time? Below are a few key factors to consider before you dive into the world of vacation rentals.

Renewed interest in travel

With the so-called post-pandemic travel boom, more people are traveling, and the demand trend for vacation rentals is also growing. At the end of 2021, the average annual revenue from vacation rental investments went up to $56,000 for the first time. 

In some of the most in-demand vacation rental markets, the average vacation rental revenues have increased by 70% or more year-on-year. Furthermore, the outlook for vacation rentals in the near future is bright. From 2021 to 2025, revenue in the vacation rental industry is expected to have an annual growth rate of 11.08%.

Uncertain future of short-term rentals in La Quinta

Despite the numbers and the potential for the City of La Quinta to earn money from tourism, the future of short-term rentals in the city is currently up for voting. Some residents have expressed their dislike of vacation rentals, which they believe can disrupt a neighborhood’s quality of life.

At present, no new short-term vacation rental (STVR) permits have been issued in residential neighborhoods in La Quinta since August 2020. But if “Measure A,” gets approved, vacation rentals will be permanently limited to commercial areas and some designated sites. This could limit your pool of real estate options if you’ve yet to purchase a property.

The matter of “Measure A” will be settled on the general elections on November 8, 2022.

Earning extra income

If you already have a property in one of the designated zones that you can turn into a vacation rental, you stand the chance of generating additional income. On average, Airbnb hosts earn a rental income of $900 a month, and even four times that or more in the most in-demand areas.

That said, this income may be contingent on travel seasons with most tourist activity. Some of the busiest times in the entire Coachella Valley include winter when snowbirds from the East Coast come to escape the snow. Summer is also a high point, especially when multi-day festivals take place.

Tax advantage and expense deductions

Like other real estate investments, a vacation rental is eligible for certain tax deductions and write-offs. Renting out your property for more than 14 days is already considered a business. And with that, you get tax return privileges. Some expenses you can deduct include repair fees, insurance, marketing, and accounting fees, to name a few.

Learn more about the tax guidelines in the IRS Topic No. 45 Renting Residential and Vacation Property.

Find the perfect vacation rental investment in La Quinta

Looking for La Quinta country club homes for sale? Let professional La Quinta realtors help you!

I am Kathleen O’Keefe Galigher, an experienced La Quinta real estate agent ready to provide you with elevated and excellent service. Connect with me at 760.567.7822 or send a message here to learn more about your investment options in the area.