Answers To Idea of Buying in Palm Springs
Palm Springs is the vacation backyard for many of us in Southern California. Wether it is attending the Palm Springs Film festival, a friends wedding, a weekend escape or the mayhem of Coachella/Stagecoach, we are all familiar with this vacation enclave.
Enjoying Palm Springs can be a challenge: there are peak seasons that effect the weather and hotel/rental prices have wild swings, plus greater Palm Springs is massive and it isn’t always clear as to where the best place to stay is.
If Palm Springs is your thing, owning a vacation rental can be a way to not only better enjoy this interesting city but a profitable one as well.
The rental market is huge in Palm Springs. Peak season runs from according to weather with June, July and August being the real scorchers. The remaining months bring cool evenings and the warmth you want on a vacation. The restaurant and art scene is huge in Palm Springs with Palm Canyon and Indian Canyon Drives being the hub for most of the action. Steady demand as a vacation destination makes Palm Springs a strong contender for a a vacation property investment.
The challenge with buying in an area you only visit infrequently is that you don’t have a good sense of the area. I recently helped a very good friend of mine purchase a property just like this and here are the lessons learned.
Location, Location, Location
There are a bunch of areas within Greater Palm Springs. Rancho Mirage, Cathedral City, Palm Desert, Desert Hot Springs, Indio and more. While all of this sections have a lot going for them, they do not have the demand that a property in Palm Springs proper will. Remember, we are talking about an income generating vacation rental and not just a place for your family to visit during the year.
Staying within Palm Springs proper was an obvious choice to maximize the possibility of rental. Best of all, renters and the owner can easily enjoy the highlights of Palm Springs.
Within Palm Springs proper it was evident to see that properties close to the main drag were going to hold a premium. Homes in the Northern end of Palm Springs proper held less value to the high winds that frequent that part of town.
The area east of the airport had golf courses and large new construction housing developments that stemmed from the early 2010’s. This area offered affordability with accessibility. A nice combo.
Architectural Style
Palm Springs really boomed in the 1950’s and 1960’s so we see a ton of stunning examples of MidCentury Design. If a MidMo is something you have had your eye on, then Palm Springs proper is the place for it. The challenge with an older vacation property was the upkeep. All houses need maintenance, older homes need more. Buying a fixer vacation rental will not be in the cards for most. While there are tons of “flipped” MidMo’s in Palm Springs, the quality of renovation is often suspect and the profit margin when comparing to what the flipper paid for it was a tough pill to swallow.
If you want the clean lines of a MidMo there are some new construction projects just east of the airport. Escena, is a collection on new housing developments just east of the airport. While some developers have gone very cookie cutter, there are a couple that have taken the MidMo vibe into play.
New vs Resale
New home construction is very much like buying a new car, there are tons of upgrades and options, a wide fluctuation in pricing based on time and of course, that new home smell. The challenge with buying new is the risk of over paying. New home developments often release is phases. The first phase is priced to get things moving as is the last stage, while stages in the middle will have higher prices. Going hog wild with options is a quick way to jack up the price as well. A “fully loaded” new home bought mid phase could easily equate to a home that is significantly over-priced, similar to driving a brand new car off the lot.
The only exception I have seen where new construction mid-phase wasn’t over-priced, was in a market that has little to no similar inventory.
Resale homes, what new construction realtors call any home that isn’t being sold to the very first owner, is what most homes are and where deals can be had when shopping for a vacation property.
Vacation homes change hands more often than a family home you reside in, it is just the nature of life. Perhaps a family had more time to vacation and that has changed, perhaps the work involved to make it a profitable rental was too much to handle or maybe a change in vacation preferences happened. More factors effect ownership in a vacation property than a primary residence so there is more turnover.
AirBnB and Short Term Rentals
The advent of sites like AirBnB and the mass-adoption of their usage has created micro economies in many cities, and Palm Springs is one of those but there are rules and restrictions. Any property that has a Home Owners Association (HOA) in Palm Springs will 99.9% of the time have a restriction to limit one rental per every 30 days. Sure, people come to Palm Springs to stay for a month, but the revenue of short-term rentals is more alluring.
Finding Your Balance
There are a handful of factors to gauge what works for you when considering a vacation rental. Do you want zero to low maintenance, are you a historical purist, do you want to max out the rental potential. A good agent will help you navigate the choices that suit your needs. Any path you chose, a vacation rental in Palm Springs can be a tremendous investment for you that can be profitable and personably enjoyable.
Once you have decided on making this move and a type of property and location to focus on, there are many additional nuances to keep in mind. How sound is the structure, is the AC in good shape, how long has it been on the market? Again, a strong agent that wants to put in the work will help you navigate this.
If you, or anyone you know has questions about Palm Springs, please do not hesitate to reach out, while this is a region outside of my regular area of work, I know great agents that work day to day in the region.
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Michael Robleto
REALTOR®-Compass Real Estate
213-595-4720
Michael Robleto is a Los Angeles based REALTOR® that specializes in Historic Pre-War residential properties and those with architectural merit. Home buying and home selling is extremely challenging in Southern California. Michael uses his vast knowledge of historic homes, residential construction and modern day marketing and digital technology to predict and solve the many problems that arise in real estate transactions. His client accolades of insight, integrity and hard work support the fact that he is not your average agent.
Michael leverages his personal passion for historic architecture to provide his clients the unknown insight on the pros and cons of older homes. Michael, the son of a contractor, a California native, grew up in an older Bungalow home and has spent 23 years in Southern California admiring the unique architecture of the region. He often writes on homeownership strategy, historic residential architecture and related topics which can be found on Facebook, YouTube, Twitter and Instagram under the common profile name of his blog; BungalowAgent or at www.BunaglowAgent.com/blog.
Michael is a committee member and frequent volunteer for the preservation efforts of Pasadena Heritage, the La Conservancy as well as a supporter of the Five Acres center for children.