Rental crunch has Santa Cruz city officials looking for new solutions.
There could be some new regulations coming from the Santa Cruz City Council in regards to secondary dwellings on your property. Often referred to as 'in-law suites", these detached homes are built with the intention of having somewhere for guests and extended family to stay when they visit, but many homeowners have discovered that they also make great income properties for short-term rentals too, like Airbnb. They're currently unregulated, but the city is considering changing that based on the current need for longer-term rentals.
The Council is concerned that these short-term rentals are leaving fewer and fewer options for long-term renters, like students and newcomers, which is why they're encouraging homeowners to consider transitioning their secondary dwellings to independent full-time suites.
There are a number of pros and cons to renting short-term and long-term rentals. A quick search on Airbnb revealed that the average cost of renting a bed in Santa Cruz is roughly $172 per night, whereas a long-term rental near the city center right now is around $1,627 per month.
Benefits & Drawbacks To Short-Term Rentals:
- Property is available when you want it to be.
- It's a saturated market and there are plenty of options for vacation rentals.
- Not a guaranteed source of income, depends on the time of year
Benefits & Drawbacks To Long-Term Rentals:
- You become a full-time landlord and you don't have the extra space anymore for family.
- There's a very high demand for rentals so you won't have to worry about your space being empty for long.
- It's a steady source of income each month.
Ultimately, the biggest difference between them is your flexibility as a homeowner. Could you be comfortable with letting that property be rented out for long periods of time? If the idea of banning short-term rentals upsets you, you're not alone. There are a number of other homeowners who appreciate being able to legally rent out their space and do what they want with their property, and they've already voiced their concearns to the governing bodies.
If you're open to the idea and would like to learn more about investment properties, and I'll be happy to walk you through the processes. If you don't have a secondary dwelling but are thinking about one, don't be daunted by the recent real estate statistics. There are still a number of affordable houses and condos that make for great investment homes.