Introduction
Palm Springs, California, is renowned for its warm weather, stunning desert landscapes, and vibrant tourism industry. The city has become a popular destination for short-term rentals, attracting visitors from various parts of the world.
In this guide, we will delve into the dynamics of the short-term rental market in Palm Springs, examining key data points and discussing the factors that make it an attractive investment option.
Home Value and Depreciation
According to Zillow, the median home value in Palm Springs is $655,035. It’s important to note that homes in the area experienced a depreciation of -0.70%. While this decrease in value may concern some homeowners, it presents an opportunity for potential investors to acquire properties at potentially lower prices.
Supply
The most popular homes are 3-bedroom homes, comprising 40.57% of inventory. This is followed by 2 and 4-bedroom homes at 17.74% and 16.95% of the total inventory, respectively.
Revenue
Chalet reports that Palm Springs has 4,348 active (Airbnb) short-term rentals The occupancy rate of short-term rentals in Palm Springs stands at a respectable 54%.
Average Daily Rate
The median ADR for the market is $539.80. The Average Daily Rate is the highest for 7-bedroom homes ($503) followed by 5-bedrooms and 6 bedrooms at $476 and $451 respectively.
Average Gross Yield
Furthermore, the average gross yield, which represents the annual income as a percentage of the property value, is 13.01%. This figure showcases the potential profitability of (Airbnb) short-term rental investments in Palm Springs.
Guests
The majority of the guests come from inside of California. 17.14% of all guests are from Los Angeles followed by San Diego with 4.75%.
Property Taxes and Regulatory Environment
SmartAsset reveals that the average property tax rate in Palm Springs is 0.90%. This tax rate is an important factor for investors to consider when evaluating the financial viability of (Airbnb) short-term rental properties.
Additionally, Palm Springs has somewhat investor-friendly short-term rental regulations. However, investors should be mindful of different zoning regulations and limitations imposed by local authorities.
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Additional Information about Palm Springs
Median Household Income
The median household income in Palm Springs, CA, is an essential indicator of the local economic landscape. As of the available data, the specific median household income figure for Palm Springs is not provided.
Climate
Palm Springs enjoys a warm and arid climate, typical of the desert region. Summers are hot, with temperatures regularly exceeding 100°F (37.8°C). Winters are mild, with average daytime temperatures ranging between 70°F (21°C) and 80°F (26.7°C). The region is known for its abundant sunshine throughout the year, making it an appealing destination for visitors seeking warm weather.
Population Size
The population size of Palm Springs, CA, varies over time. As of the available data, the specific population figure for Palm Springs is not provided. However, the city is a popular tourist destination and attracts a substantial number of visitors each year.
Sports Teams and Colleges
Palm Springs hosts various sporting events and is home to the Palm Springs Power baseball team, an independent collegiate summer baseball team. In terms of colleges, Palm Springs does not have any universities within its immediate boundaries. However, there are several educational institutions and universities in the surrounding area.
Crime Rate
The specific crime rate figure for Palm Springs, CA, is not provided. However, like any city, Palm Springs has its own crime statistics, and it’s advisable for visitors and residents to stay informed about local safety measures and take necessary precautions.
Visitor Demographics and Attractions
Palm Springs attracts visitors from diverse locations. The total number of visitors to Palm Springs, CA, is not provided in the available data. However, the city’s appealing climate, natural beauty, and vibrant cultural scene entice tourists from both within the United States and internationally.
Some of the biggest tourist attractions in Palm Springs include:
- Joshua Tree National Park: Located nearby, this national park showcases stunning desert landscapes and unique Joshua trees.
- Palm Springs Aerial Tramway: Offering breathtaking views, the tramway takes visitors up the rugged cliffs of Chino Canyon to Mount San Jacinto State Park.
- Indian Canyons: These canyons are home to beautiful hiking trails, palm groves, and cultural sites of the Cahuilla Indians.
- Palm Springs Art Museum: This renowned museum features a diverse collection of art, including contemporary, modern, and Native American works.
- Coachella Valley Preserve: A natural oasis, this preserve offers opportunities for hiking, wildlife spotting, and exploring the Thousand Palms Oasis.
Peak Season in Palm Springs
Palm Springs experiences peak tourism during the winter months, particularly from November to April. Many visitors from colder climates flock to Palm Springs to escape the winter chill and enjoy the warm weather. During this time, the demand for (Airbnb) short-term rentals is typically high, resulting in increased occupancy rates and potential profitability for rental property owners.
Conclusion
Palm Springs, with its desirable climate, stunning landscapes, and vibrant tourism industry, presents a promising opportunity for short-term rental investments. Despite the -0.70% home depreciation, the market’s overall growth, high occupancy rates, and attractive average gross yield make Palm Springs an appealing destination for investors.
While the exact figures for median household income, population size, crime rate, and total number of visitors are not provided, they are crucial factors for individuals considering investments or visits to Palm Springs. With its diverse attractions and peak season in the winter months, Palm Springs continues to captivate visitors and provide an alluring environment for the short-term rental market.
