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Purchase in the County versus the City

3914 Saddle, Vacation Home Rental next to Heavenly Ski Resort

All owners of vacation home rentals in South Lake Tahoe, that are rented for a period of 30 consecutive days or less, are required to apply for a Vacation Home Rental Permit from the local jurisdiction. There are multiple jurisdictions in the basin. Today we will focus on two of the most popular ones on the South Shore of the Lake.

City of South Lake Tahoe

On December 27^th, 2017 the City of South Lake Tahoe updated their Vacation Home Rental Ordinance. Most of the changes were just to tighten up the citation structure to hold renters and owners accountable. One of the most impactful rules is they created a CAP of 1400 permits within the City Limits (not including the Tourist Core). Due to the CAP being reached in January 2018, there is now a waitlist for VHR permits within the City Limits. At the time of writing this blog there are approximately 133 applications on the waitlist. Therefore we anticipate it will take over a year to get a permit within the City limits.

New Rules

Fines – Now both the owner of the VHR property and the guests can be fined $1,000 for any violation of the City’s VHR ordinance. There is no longer a warning for the first violation. Three fines within a 24-month period will result in revocation of the VHR permit.
Mandatory bear box, with number of cans based on square footage of the home
No use of hot tub between 10 pm and 8 am
No special treatment for applicants in escrow (they used to go to the front of the line)
Bear boxes shall be installed in all homes with a vacation home rental permit by July 31, 2018
Owners of homes with a VHR permit are required to inform guests of the requirement to comply with the City’s regulations, failure to do so may result in a citation to the owner

They also mentioned that 5 community service officers will be hired to help patrol the neighborhoods and answer calls for permit violations. This probably will help ease some of the locals concerns and provide a faster response time.

What about the Tourist Core?

As mentioned above, the CAP does not include properties within the Tourist Core area in the City. For VHRs in the Tourist Core the application process is much simpler compared to the rest of the City. With no CAP or waitlist to deal with, you can have your permit in place within a few weeks. But there are fewer homes and condos in the Tourist Core area compared to the rest of the City. You just have to know where to look to find them… or have us look for you.

The Tourist Core area is outlined in black on this MAP. It runs from the Casinos down Lake Tahoe Blvd (Hwy 50) to Fairway Avenue and up Ski Run Blvd to just past Pioneer Trail. The area is mostly comprised of commercial properties, but there are some homes and a couple large condo complexes. The largest condo complex is Lakeland Village, which is located on the Lake and is a very popular VHR spot. New condos and homes are currently being built or in the starting faze of planning. New projects include Gondola View Estates located behind the Casinos bordering the Heavenly Gondola and a new complex planned across the street from Heavenly Village Shopping Center. Contact Dan and his Team for more information on these new projects and to see all the available listings in the Tourist Core area.

Sierra Shores Unit 8, in the City of SLT

What neighborhood is best for VHRs?

There are many areas within the City Limits that are popular VHR spots and historically bring in higher nightly rates which means more income to the owner. Here are the top areas (click on the neighborhood name to see all listings currently on the market in that area):

Tahoe Keys – The only neighborhood of its kind in Lake Tahoe, with channels throughout giving you access to the Lake on your boat. Most homes have a private boat dock in the backyard, and some others have a boat dock in the owners marina. There is a mix of homes and condos in the area, and a HOA that has a lot to offer. This area is very popular for VHRs in the Summer.

Heavenly – If you want to be close to Heavenly Ski Resort than this is the neighborhood for you. There are some large lakeview homes, older smaller cabins, and an HOA area called Tahoe Tyrol that is like a Bavarian Village. This is the prime VHR spot in the Winter.

Stateline – This is the neighborhood located closest to the Casinos and Heavenly Village Shopping Center. There is a semi-private beach and small marina on the Lake, and a mix of large lakeview homes and small old cabins. Popular for VHRs year round. Some properties in the Stateline area are included in the Tourist Core that has more lenient VHR rules.

Al Tahoe – Cute quiet neighborhood located in the middle of town and bordered by the Lake and an open meadow. Area has a lot of smaller old cabins mixed in with some newer larger homes and a handful of lakefront homes and condos. Popular for VHRs year round.

El Dorado County

The County area of South Lake Tahoe includes everything that isn’t within the limits of the City of South Lake Tahoe but still within El Dorado County. This includes Meyers, Upper Truckee, Christmas Valley, and over half of Pioneer Trail. There is no CAP in the County currently, so the process is faster than the City, and the permit fees are much lower. These factors have made the County a popular place to purchase a VHR for the past few years.

Historically, the County has followed what the City has done with their VHR rules to keep everything fair. But after the City made changes to their rules the County has not yet made changes to their ordinance. The County Board of Supervisors is planning a meeting to discuss possible changes to the VHR ordinance. We will post an update after that meeting to keep you informed.

What neighborhoods are best?

Cabin at Heavenly Ski Resort – 3938 Saddle Rd

Any home has the potential to be a VHR, but certain neighborhoods will get you more income than others. In the County, the rule of thumb is the further away from the Casinos the less the income will be. Here are the top neighborhoods for VHRs in the County areas (click on the neighborhood name to see all listings currently on the market in that area).

Montgomery Estates – By far the most popular neighborhood in the County, Montgomery Estates has mostly higher end homes that are well cared for. The neighborhood is surrounded by forest and only a few miles from the Casinos which makes it popular.

North Upper Truckee – This “secret” neighborhood has been a locals paradise for many years. But recently tourists have started to realize how great it is, and it has started to get more VHRs. It has easy access to Hwy 50 at the base of Echo Summit and ties into the Y area near Camp Richardson with it’s popular beaches in the summer.

Elks Club/Country Club Estates – Located between Hwy 50 and Pioneer Trail, this neighborhood has a mix of newer larger homes and older cabin style properties. The Lake Tahoe Golf Course is close and the Upper Truckee River flows along the north end of the neighborhood.

Final Comments

With the recent changes in the VHR rules in the City, and the potential of new rules in the County coming this summer, we are seeing a lot of buyers looking in the County areas. This may slow down if the County enacts new strict rules similar to what the City did. But for now we are seeing properties in the County going into escrow pretty fast compared to the City.

What does this mean for you?
If you want to purchase a VHR in the City of South Lake Tahoe you may have to wait over a year to get the permit. If you want to purchase a VHR in the County area you will need to be ready to act fast. Dan and his team can assist you in submitting an offer ASAP to make sure you get the house you desire.

Any property in Lake Tahoe has the potential to be a VHR, but some will earn more income than others. We can assist you in getting rental income projections from Invited Home. This will help you know ahead of time what kind of income the property will bring in before you even put in an offer. Our Team can assist you in finding the perfect VHR property and assist you in finding a good local Property Manager to make your dream of owning a Tahoe vacation home a reality. Contact us now to get started.

For up-to-date information on Vacation Rentals in the Tahoe area, please check out all of our other articles on the subject HERE.

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Vacation Home Purchases in South Lake Tahoe, CA