Interested in a Lake Tahoe Investment?
Many of the homes that you come across in the South Lake Tahoe area are owned by a private party and rented as a vacation home. As a result there has been a long debate in the town as to how many vacation rental homes vs. primary living homes there are available. Due to this, many local prospective home buyers are finding it more difficult to find a home to purchase. Although you may assume that buying a home in Lake Tahoe and using it as a vacation home may be easy, you will need to read this valuable blog on how to accomplish that.
Step 1- Finding a Vacation Rental Company
Your first step when considering renting your home is to locate a good vacation rental management company. There are quite a few companies to pick from but I suggest you contact Dan Spano for a recommendation. Focus on management companies that specializes in renting homes like the one you are thinking of purchasing.
Step 2- What type of VHR permit do you need?
You will need a VHR permit if you intend to use your property as a VHR. There are three different types of VHR permits. The type of permit you need will be based on operations and property location. You may be able to obtain a quick over-the-counter permit, or may be required to go through a public hearing process depending on the properties location. The three types of VHR permits are:
- VHRs located in a Commercial/Tourist Core Area
- VHRs located in a Residential Area, in which the owner does not occupy at the time of rental
- Shared VHRs located in a Residential Area, in which the owner does occupy at the time of rental
To determine if your property is located in a Commercial/Tourist Core Area versus Residential area, click on the following link: City of South Lake Tahoe map. Yellow indicates residential zones, while red indicates commercial/tourist core area zones.
Step 3- Application
Applying for a Vacation Rental Permit is the first step and this is the application and check list you will need to refer to. To apply for a VHR located in a Residential Area you will need to pay the following fees:
- Application Fee: $426
- Inspection Fee: $133
- Re-Inspection Fee: $80
Step 4- The Pre-Inspection
City of South Lake Tahoe will need to be scheduled to do a formal Vacation Rental new permit inspection. This is the check list you will need to refer to in order to prepare for the inspection. You may need to have a re-inspection if you do not have all of the items on the check list done before the City comes out to do their inspection. This will cost you more money and time.
Step 5- City Inspection
This step is setting up the inspection date with the City so they can make sure that your home is up to code. The inspection can be very quick and easy. If the property has been a vacation rental in the past it should already be set up with the required things listed on the pre-inspection check list.
Step 6- Zoning Approval
The city will then send out a letter to every neighbor within 300 feet asking if they any objections. The City will set up a public hearing to review concerns from neighbors if they receive letters back with objections within 3 days before the “original hearing”. There will probably be no hearing if the City doesn’t receive any letters back. The Zoning Administrator will review, approve or deny your application. If a neighbor simply does not want a vacation rental next door that is not enough reason to deny the request. But since the City cannot limit public input per the law, the hearing must include all public input. The number of parking spaces will be important in evaluating the permit request.
Step 7- Permit Fees
Before the permit is issues the applicant must pay the Annual Permit Fee. The City bases the annual fee on the maximum occupancy. You can determine the maximum occupancy by the number of paved parking spaces and the number of bedrooms. For parking spaces, the formula is 4 occupants per parking space. For bedrooms, the maximum occupancy is listed in the chart below.
There is good news if you are purchasing a property because you can start the VHR application process while a property is in escrow. A good realtor will always include a contingency in the purchase offer to receive a VHR permit. Since the property is in escrow, the Zoning Administrator is required to make a decision on your property within 30 days of receipt of a complete application. At the time of application submittal, submit a California Purchase Agreement and notify City staff that you are in escrow. Always work with an experienced Realtor.
|VHR Annual Permit Fee based on Maximum Occupancy|
|Maximum Occupants||Permit Fee|
|Studio = 2 occupants||$150|
|1 Bedroom = 4 occupants||$150|
|2 Bedroom = 8 occupants||$300|
|3 Bedroom = 10 occupants||$600|
|4 Bedroom = 12 occupants||$600|
|5+ Bedroom = 14 occupants||$800|
|Maximum Permit Fee is $800.|
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