Santa Rosa, California is known for its scenic landscapes, blooming culture, and strategic location in the heart of Sonoma County. It’s in the middle of wine country, and home to vineyards, galleries, shopping, as well as plenty of outdoor recreation. More than 10 million visitors roll through Sonoma County every year, and a lot of those tourists make a stop or two in Santa Rosa. This makes it an ideal place for a short-term rental.
Two things you need to know as a real estate investor who has their eyes on Santa Rosa, however:
First, location matters. You’ll need the right neighborhood to attract your short-term visitors.
Second, there are strict rules in place around short-term rentals in Santa Rosa, which will impact how you invest and where you invest.
The city’s appeal extends beyond its wine region. With attractions like the Charles M. Schulz Museum, Luther Burbank Home & Gardens, and the nearby Russian River, there’s never a shortage of things to see and do. This ensures a steady inflow of tourists, all needing places to stay.
Here’s where you want to focus your attention when choosing the right neighborhood for an investment property that will serve as short-term accommodation.
Bennett Valley as a Santa Rosa Investment Idea
Vacation properties do very well in the Bennett Valley area, and that’s because the vibe is peaceful, quiet, and attractive to travelers looking for a safe and pretty place to stay. There’s lots of wine to taste, the Bennett Valley Golf Course, and some great hiking at Sonoma Mountain Regional Park. For a less strenuous walk that’s still easy on the eyes, Howarth Park is an attractive way to spend some time and exercise.
Homes, condos, and townhouses are available to purchase in Bennett Valley, and the per-night rental rate you’ll earn on these properties is likely to be high. Even a one-bedroom home for rent in this area can bring in around $100,000 in a year, and larger homes with higher rental rates can bring in even more. Occupancy won’t be too difficult, and when you provide a great experience, you can expect fantastic reviews, which will drive more bookings.
Historic Railroad Square
Owning a short-term rental property in Historic Railroad Square is going to be a good investment. It’s a walkable hub, with antique stores, cafes, and locally owned and loved shops and boutiques lining the streets. Restaurants are housed in old brick structures, and there’s an abundance of good food to be found. Guests looking for a place to stay in Santa Rosa will be attracted to rental homes located here when they want to experience history and old-town charm. It’s also close to The Prince Memorial Greenway, where people love to walk and bike along the pretty Santa Rosa Creek.
This neighborhood is listed on the National Register of Historic Places, which means you might be investing in a little more in a property here, especially if you are hoping to buy a historic home.
Learn About the Junior College (JC) Neighborhood in Santa Rosa
Santa Rosa Junior College is a two-year community-focused school with more than 100 majors and lots of adult education and continuing education classes. There are also workshops, seminars, and events held on campus, bringing plenty of visitors from all over the state and different parts of the country. It’s not a bad idea to offer a short-term rental home in this area, where it’s easy to get to the school and a safe and convenient place to stay.
Investors will typically buy Victorian homes and properties with an early 20th century feel. They’re attractive and well-maintained and less expensive to acquire than some of the homes in neighborhoods that start at a million dollars.
Guests will love short-term rentals in this neighborhood because it’s so accessible and walkable. There are plenty of grocery stores, restaurants, and bars.
Name Recognition: Investing in Mark West
Mark West is an up and coming neighborhood for short-term homes and a popular spot for Airbnb rentals. The neighborhood carries the same name as a popular wine brand, and that’s no accident. Both the wine and the neighborhood are found along Mark West Creek, where there’s a view of rolling hillsides and California oak trees and redwoods. Talk about scenic.
The numbers tell a profitable tale. Here is how Airbnb breaks down the likely income in this neighborhood from a short-term rental home:
- Average Revenue – $145.9K per year
- Average Daily Rate – $974.8 per night
- Average Occupancy Rate – 41%
The good news is that there is plenty of inventory in Mark West. For investors looking to close on an investment property right away, check out this neighborhood, which has at least 100 homes for sale.
What to Know About Short-Term Rental Investments in Santa Rosa
As we have mentioned, the rules around short-term rentals in Santa Rosa are strict.
There’s a Short Term Rentals Ordinance in place, and we recommend you review that thoroughly before you buy a property or decide to convert a property you currently own into a short-term rental. The law requires all short-term rental property owners within City limits to obtain a Short-Term Rental Permit and follow the City’s specific operating standards and requirements.
A short-term rental is defined by this law as a dwelling unit, or any portion thereof, utilized for residing, lodging, sleeping, or other occupancy purposes for less than 30 days.
At the time of this blog writing, the City is not accepting new permit applications for short-term rental homes that are not hosted. These are capped, by law, at 182. There’s no hope that new applications will be accepted if the number of non-hosted short-term rentals drops below that number, either. The City is prepared to reduce the short-term rental numbers through attrition.
In order to apply for a Hosted Short-Term Rental, the property owner must live and sleep on the property, and the property must be the owner’s principal residence (defined as the home where the owner resides for more than one-half of the year).
This may limit your options if you don’t already have a permit to rent out a home that you’re not also living in. Or, you’ll have to be creative about how you rent out the property that you’re hosting.
- Location Limits
Hosted Short-Term Rentals can operate anywhere in the City, however, those non-hosted units have limitations on where they can be. Non-Hosted Short-Term Rentals can operate in the following zoning districts:
- Core Mixed Use (CMU)
- Station Mixed Use (SMU)
- Maker Mixed Use (MMU)
- Neighborhood Mixed Use (NMU)
- Rural Residential (RR)
- Single Family Dwelling (R-1)
- Residential Planned Development (PD), where not explicitly prohibited
- Medium Density Multi-Family Residential (R-2)
- Multi-Family Residential (R-3)
- Transit Village Residential (TV-R)
- Office Commercial (CO)
- Neighborhood Commercial (CN)
- Community Shopping Center (CSC)
- General Commercial (GC)
- Transit Village-Mixed (TVM)
This may also impact neighborhood selection.
- Size Limits
According to the law, the maximum number of people who can stay in a short-term rental in Santa Rosa depends on the number of bedrooms. The City allows two people per bedroom plus two additional people per property. Think about this in terms of the number of bedrooms when you’re purchasing a home or deciding how to best rent out a part of your own home. While the number of bedrooms is key to maximizing income, you also want to think about how you advertise sleeping space. If you have a four-bedroom home that’s available on the short-term market, you can technically advertise it as sleeping 10 people.
While we’re focusing on neighborhoods within Santa Rosa today, there is value in buying a property that is outside of the city limits of Santa Rosa because this will make it a lot easier on you when it comes to approval and qualifying for the maximum number of people as guests.
There’s a lot of nuance around short-term rentals in Santa Rosa, and if you’d like to talk more about location or logistics, please contact us at Prestige Real Estate & Property Management. We manage homes in Sonoma County, including Santa Rosa, Windsor, Sebastopol, Petaluma, and Rohnert Park.
