California Airbnb Laws (2025): Everything Hosts Need to Know

Last updated: June 2025

If you’ve been thinking about starting or expanding your short-term rental business in California, there’s never been a better time to do so. According to Statista, the vacation rental market is expected to achieve a compound annual growth rate (CAGR) of 4.12%, potentially reaching a market volume of $24.78 billion by 2029.

What’s more, the short-term rental industry in California has made property ownership more accessible to younger adults. Many can now afford a house payment by offsetting costs with rental income.

All of that being the case, it should come as no surprise that many entrepreneurs are leveraging short-term rental businesses to achieve impressive returns on their investments. However, as the market share of such properties grows, so too have California Airbnb laws that govern how and where businesses can operate.

As a result, navigating today’s short-term rental market means mastering the various California Airbnb rules and regulations set in place not just by the state but also by the city or county. This guide will provide an overview of the key regulations and considerations for short-term rental hosts and property managers.

What’s considered a “short-term rental” in California?

California Airbnb laws are specific in what they consider a short-term rental. According to the California Senate Bill No. 60, a short-term rental (STR) refers to any “residential property or portion of a residential property that is rented to an individual or group for 30 consecutive days or less.”

Simple, right? Well, yes…and no. For example, in some California markets, “short-term rental” and “vacation rental” may be used interchangeably. However, some municipalities prohibit vacation rentals specifically.

Moreover, with the success of Airbnb and the subsequent exponential expansion of the industry, this rather general regulation has been adjusted and adopted with various parameters by individual communities within California. This means that California short-term rental laws vary from city to city.

How to start an Airbnb in California

The very first step toward starting your business in California is to register your business with the appropriate city or county agencies. This process is handled at the local level, not the state.

Registering your business ensures it’s legitimate and thus potentially protects you from certain legal or financial issues and damages. Additionally, it’s helpful if you think you’ll eventually look for loans or create separate business bank accounts to manage your funds.

Creating an LLC for your short-term rental business

There are multiple structures you can choose for your STR business, including:

• Corporation
• Limited liability company (LLC)
• Limited partnership
• General partnership
• Limited liability partnership
• Sole proprietorship

Each of these options comes with advantages and disadvantages, making it worth your time to research each thoroughly. For a full description of each option as it is defined by the State of California, visit the Secretary of State’s Entity Types page.

If you choose to register your STR business as a limited liability company (LLC), that choice comes with a bit of a financial safety net. Categorizing your short-term rental business as an LLC means that you can protect your personal assets. This is because, under the parameters of an LLC, these assets are considered separate from your business debts/assets and are protected in the event of a lawsuit involving your business.

LLCs also come with the benefit of greater flexibility in how you choose to run your short-term rental business and manage your profits. They tend to keep state reporting requirements relatively minimal. For more on the implications of an LLC for your business, including fees, tax structures, and additional requirements, visit the State of California Franchise Tax Board.

Required documentation to start a California short-term rental business

Once you’ve decided on a business structure, your next steps will be to pull together the required documentation to officially complete your California short-term rental business registration. This involves submitting the following documents to the Secretary of State for California:

• Proposed name of your business
• Articles of Organization or Incorporation (for LLCs or Corporations)

You’ll also need to file for a series of permits and licenses. This usually starts with applying for your Employer Identification Number (EIN) from the Internal Revenue Service. Then, you will need to check local city or county requirements for your short-term rental business.

For example, in cities like San Francisco and San Jose, you’ll need to register your business there in addition to registering with the state. You’ll also need to account for any required local short-term rental permits (more on these later when we discuss specific cities) as well as tax obligations.

Tax implications for California short-term rentals

While the specific California Airbnb laws regarding taxes will vary depending on locality, the vast majority of short-term rentals in the Golden State will be subject to taxation. Because California collects a state income tax, you’ll be subject to both federal and state taxes, as well as a transient occupancy tax. The transient occupancy tax ranges from 8% to 14%, depending on the locality.

Federal tax implications

The United States government considers a property to be a short-term rental business if it meets the following qualifications:

• You rent your property out for more than 14 days each year.
• You use that property personally for no more than 14 calendar days (or more than 10% of the time that your property is occupied in a calendar year).

If you meet both of these requirements, you will have to register it as a short-term rental business. However, that also means you can maximize your potential federal tax benefits and deductions. Common deductions include:

• Repairs and maintenance
• Insurance premiums
• Utilities like water, gas, and electricity
• Supplies like bed linens or bath towels (and even wine glasses or pool toys!)
• Legal and accounting fees

To maximize these deductions and to make the smartest financial moves when preparing your taxes, we suggest working with a knowledgeable California-based accountant.

Transient occupancy tax (TOT)

The most universal California vacation rental tax is the transient occupancy tax (TOT), which applies to nearly all short-term rental properties in the state. This tax consists of a percentage of the nightly rental rate and must be paid to the state.

There is not one TOT rate set by the state of California. Rather, the TOT rates are set by local governments and thus are dependent on the location of your rental property. Typically, though, the TOT falls between 8-14% of a short-term rental’s nightly rate. For example, the San Francisco transient occupancy tax is 14%.

Generally shared California Airbnb laws

First, let’s cover the points that are most often shared between short-term rental ordinances. Generally speaking, most major California cities have rules and regulations like obtaining a business license or permit, paying vacation rental-specific taxes, and adhering to occupancy and noise limits.

City registration and fees

The vast majority of cities in California require short-term rental businesses to register their business and properties with the city. These applications are often accompanied by fees, which vary widely depending on the municipality.

Occupancy rules

Many California city ordinances agree that short-term rentals also need to be primary residences. The definition of a primary residence varies between municipalities, but generally requires that you live full-time at your short-term rental address for at least a portion of the year (anywhere from 60 days to 9 months). Some cities also restrict such properties by:

• Dwelling type: Not all properties are considered equal in the eyes of short-term rental ordinances. Many cities, for example, place restrictions on the percentage of short-term rental units in a given multi-unit residential complex. Others prohibit such rentals housed in certain accessory structures, like attics or pool houses.

• Dwelling location: In more populous locations, cities tend to restrict short-term rental properties to specific zones or districts of the city.

• Occupant number: Capping capacity is also a common theme among short-term rental legislation in California. While these rules can vary, typically California cities cap occupancy in a given rental unit to two adults per bedroom (up to a total of 10 adults per unit).

• Minimum stay length: Several California cities mandate that short-term rental reservations must meet a minimum number of days. Other cities use these minimums to eliminate the entire market by stating the minimum stay length is weeks or months long.

Promote safety

Guests in a short-term rental property expect safety and security in their accommodations. Most California ordinances stipulate best practices when it comes to promoting safety. These typically include:

• Clearly stated emergency information: This can include signs indicating the location of fire extinguishers or emergency exits throughout the short-term rental unit.
• Designated contact person: Many municipalities mandate that you elect a local contact person who will be “on-call” in case there are any issues with the short-term rental. This contact person is particularly important if your city allows unhosted short-term rentals or if you will be far away for a given time.
• Meets all local building and safety codes: Keeping up with the maintenance for your short-term rental is imperative and these regulations require that you keep all rental units up to code.

Promote neighborliness

Also central to many California municipal codes relating to short-term rentals are articles that encourage the well-being of the overall neighborhood. These regulations can include restrictions on:

• Noise: Many areas require short-term rentals to follow the rules of local noise ordinances.
• Parking: Some California cities, particularly those already plagued by car congestion, enforce parking limitations or restrictions for such rental properties.
• Trash: Several cities in California also impose garbage guidelines for short-term rental units.

California Airbnb laws by major city

There are no state-wide California Airbnb laws. Cities throughout California have the right to establish their own rules and regulations regarding short-term rental properties. This can mean different permits, restrictions, and permissions will be dictated by which city you host your business in.

This city-by-city review will expand on the general points outlined above by noting the key unique factors of each municipality’s codes when it comes to short-term rentals. Consider these variations, additions, and exceptions as further steps you’ll need to take beyond the general guidelines outlined earlier.

Los Angeles

Los Angeles has become one of the top cities for new Airbnb hosts, but setting up a short-term rental requires compliance with specific regulations under the Home Sharing Ordinance. According to Los Angeles Airbnb laws, hosts must register their property with the city to obtain a Home Sharing Registration (HSR) number, valid for one year, and prove that the property is their primary residence, rented for no more than 120 nights annually.

Additional requirements include registering for a TOT Certificate and adhering to restrictions on Rent Stabilization Ordinance properties. For those wishing to rent beyond 120 nights, an extended home-sharing permit is available, though it comes with higher fees and stricter criteria.

Read more about Los Angeles Airbnb laws here.

Long Beach Airbnb laws

Long Beach offers a relatively liberal policy when it comes to short-term rentals.

Unlike many of its counterparts, the city allows for hosted and nonhosted rentals (meaning you are not limited to your primary residence). That being said, many regulations are still in place as outlined in City Ordinance 20-0045.

Register your short-term rental annually

You’ll need to register your short-term rental property in Long Beach each year at a cost of $400 per year. Your registration number provided by the city will need to be listed on all promotional or advertising listings for the property to ensure your compliance.

Meet the city requirements

As part of your registration for your Short-Term Rental Certificate number, you will need to confirm the eligibility of your property. This means you will need to show proof of:

Residency

If your short-term rental property is your primary residence, you will need to furnish proof in the form of official documents (e.g., driver’s license, loan documents, voter registration card). If your property is not your primary residence but is held by your short-term rental LLC, you will need to provide a notarized document that states you have permission to make decisions on behalf of the business.

Dwelling type

Long Beach currently only allows short-term rentals in single-family homes, condominiums, and apartment units in a residential complex, as well as maids’ quarters and guest houses. Short-term rentals cannot be hosted in pool houses, casitas, garages, or other outbuildings.

Capacity cap

Long Beach mandates maximum numbers of short-term rental units in a given residential complex as follows:

• A 2-10 unit building may have one short-term rental
• A 11-50 unit building may have up to 10% short-term rentals
• A 51-100 unit building may have up to 12% short-term rentals
• A 101+ unit building may have up to 15% short-term rentals

Long Beach also caps the number of guests that can stay in a short-term rental unit at 10 adults (or two persons per bedroom).

Transient occupancy tax

Long Beach hosts must also pay the transient occupancy tax (TOT) on each booking. The TOT rate in Long Beach is 13%, which applies to all stays of fewer than 30 days and is to be paid every month.

Oakland Airbnb regulations

Perhaps presenting some of the most stringent short-term rental requirements in all of California is Oakland.

While Oakland does not mandate a maximum number of rentable nights in a calendar year, their city code breaks down the usage of properties into four main categories:

• Permanent Residential Property: Properties that are rented for 30 days or more.
• Semi-Transient Residential Property: Properties that are occupied mostly as permanent residential properties. However, up to 30% of these properties may be used as short-term rentals.
• Bed and Breakfast Residential Property:
  • Are contained in a single or double-family dwelling owned by the host
  • Have a capped capacity of 12 adult guests at any time
  • Are located in a historic property or district zoned A, B, C, D, or that holds landmark status conveyed by the city
  • Include food and beverage services for guests only
• Transient Habitation: Any property that is rented for less than seven nights (a calendar week) is considered “transient habitation,” and many areas of the city prohibit such habitation activities. A TOT rate of 14% is applicable for stays of 30 days or less.

Conditional use permitting

Oakland allows semi-transient residential properties and bed and breakfast properties to exist, provided they hold a Conditional Use Permit (CUP). This application requires that any property applying meets a series of parameters. These assessments include whether the property:

• Aligns with the neighborhood
• Is an asset or enhances the neighborhood
• Complies with all local ordinances and requirements

Applicants will have their materials reviewed by the Board of Zoning and will need to appear at a public hearing for their application to be discussed. CUP fees begin at $2,500, and the application process can take several months from start to finish.

Santa Clara Airbnb laws

Santa Clara has implemented regulations for short-term rentals to ensure they are operated responsibly and align with community standards:

• Property owners must obtain a short-term rental permit.
• The property must be the owner’s primary residence.
• Rentals are limited to 180 days per calendar year if the owner is not present during the stay.

Additionally, Santa Clara enforces a transient occupancy tax of 13.5%, which must be collected and remitted for all short-term rentals. Hosts are also required to comply with zoning laws, noise ordinances, and parking regulations to minimize disruption to neighborhoods.

San Diego Airbnb regulations

San Diego County short-term rental regulations offer yet another approach to managing the market. What’s most important to know is that there’s currently a cap on how many short-term rental homes there can be across San Diego (only 1%), which means that you might find it difficult to enter an already saturated market.

Short-term rental licensure

The city requires that all short-term rentals in San Diego have a license to operate. Following the San Diego Municipal Code, these licenses fall into a three-tiered system for short-term rental occupancy (STRO). These include:

• Part-Time STRO: Short-term rental properties that are rented less than 20 days per year.
• Home-Sharing STRO: Short-term rental properties are rented more than 20 days per year, provided that:
  • Only a room or rooms are rented
  • The host remains on the site (code permits the host to be absent for up to 90 days of a calendar year)
• Whole-Home STRO: Short-term rental properties that are rented for more than 20 days per year and encompass the use of the entire home. San Diego further subdivides this into Whole Home STROs on the incredibly popular Mission Beach and beyond.

Additionally, a TOT is required. However, the tax rate will vary between 11.75%, 12.75% and 13.75% depending on where your rental is located.

San Francisco Airbnb rules

Though San Francisco has earned a reputation for having some of the most stringent Airbnb laws in California, setting up a short-term rental in the bustling hub of San Francisco takes only a few steps. Let’s walk through them below.

Obtain a business registration certificate

San Francisco is one of the California locales that require local short-term rental business registration. Applications can be submitted via the city treasurer, and fees are sliding depending on your gross receipts for a calendar year.

Register for your Short-term Residential Rental Certificate

You’ll also need to get a Short-Term Residential Rental Certificate from the Office of Short-Term Rentals. These applications can be completed online and come with an application fee of $925.

Once approved, you will receive a seven-digit registration number (STR-#######) that you must use on any short-term rental listing site like Airbnb. This number is valid for two years and can be renewed.

Meet the city requirements

As part of your registration for your Short-Term Rental Certificate number, you will need to confirm the eligibility of your property. This means you will need to show proof of the following.

Primary residency

San Francisco requires that you live in your short-term rental property for at least 275 nights of a 365-day calendar year. They also mandate that you have lived in that home for a minimum of 60 days before you can apply.

You can either rent or own the short-term rental property. However, in either case, you need to ensure you are conforming to any rules associated with your own occupancy. (For example, any homeowners’ association or other tenant rules and regulations.)

Moreover, if you happen to own multiple units in a single apartment or condominium complex, San Francisco Airbnb laws allow you to only list one of those units as a short-term rental.

Dwelling type

San Francisco will not allow short-term rentals to operate in accessory dwelling units (ADUs). Following the state of California’s ADU definition, these include any secondary unit, such as an in-law apartment or attic apartment, attached to an otherwise single-family home.

Insurance coverage

San Francisco mandates a minimum of $500,000 of liability insurance coverage for short-term rental properties to ensure adequate coverage if any catastrophe were to occur. You will need to furnish proof in print or online that you have this coverage in place. If you list your short-term rental property exclusively with Airbnb, this insurance coverage is included as part of their AirCover liability insurance program.

Regular recordkeeping and reporting

Beyond registering your San Francisco short-term rental property, the city’s administrative code requires that you also keep records of your property and report your earnings regularly. This entails:

• Quarterly reports (January, April, July, and October) in which you state the quantity (as well as the dates) of short-term rentals you booked for a given property
• Documenting residency dates (to ensure you meet the 275 minimum residency), insurance coverage, and any requested safety/maintenance upkeep to the property
• Posting safety guidelines throughout the short-term rental property, for example, including clear signage that notes the location of fire extinguishers or emergency exits

Tourism improvement district fee

The Tourism Improvement District (TID) fee is a charge that was created to fund marketing and promotional efforts that boost tourism in certain areas. It’s typically collected by businesses within the district to support these initiatives.

The TID fee can be passed on to guests. The law mandates that qualified website companies collect this fee at booking. For bookings outside these platforms, you, as the host, will now file and pay the TID annually.

San Jose short-term rental laws

Compared to other Californian urban centers, San Jose’s short-term rental laws make setting up a San Jose Airbnb easier in some aspects but more difficult in others. Let’s review the key distinctions here when it comes to San Jose short-term rentals.

Obtain a business license

San Jose requires a business license for short-term rentals, the fee for which is $195 annually. This fee can be paid online or by mail. The business license is required for all businesses operating within city limits and includes short-term rental hosts.

Pay the transient occupancy tax

In addition to obtaining a business license, San Jose Airbnb hosts must also pay the transient occupancy tax (TOT) on each booking. Currently, the TOT rate in San Jose is 10%, which applies to all stays of fewer than 30 days. Hosts are responsible for remitting the TOT to the City of San Jose on a quarterly basis.

Occupancy caps

San Jose municipal code makes clear that a short-term rental may have only a maximum of 3 “transient occupants” per single-family home when the short-term rental owner/manager is present. If the owner/manager is not present, San Jose’s short-term rental law stipulates a maximum of:

• 2 transient occupants in a studio apartment
• 3 occupants in a single-family home
• 2 more transient occupants per additional bedroom

The maximum capacity allowed by the code is 10 transient occupants.

Rental caps

If the host lives at the property, they are afforded unlimited rental days. If the owner is not present at the property (for instance, if the property is a second home), San Jose code limits the number of possible rental days to 180 in a calendar year.

Code compliance

All San Jose short-term rentals must be kept in accordance with the local housing codes (as summarized in Chapter 17.20 of the local ordinances).

Regular recordkeeping and reporting

San Jose’s code also requires that you keep records of your property for a three-year duration “after each period of incidental transient occupancy” (or following each short-term rental period). These records should include:

• Documentation of the payment of TOT (either by the host or by a hosting platform like Airbnb)
• Documentation related to compliance (e.g., rental caps and occupancy caps noted above)

These documents should be made available if requested by the city manager, attorney, or auditor. Keep in mind as well that if your short-term rental is found not to be in compliance, the San Jose code allows for it to be terminated at any time.

Santa Monica Airbnb rules and regulations

Santa Monica is one California city that offers clear guidelines laid out in their city ordinance (Chapter 6.20) that distinguish between vacation rentals and home sharing:

• Home-sharing is defined as the rental of one or more bedrooms in one’s primary residence for 30 consecutive days at a time or fewer.
• A vacation rental is defined as the rental of an entire home for a visitor’s private and exclusive use.

Local business permit

Short-term rental businesses operating in Santa Monica need to register their business with the city and gain a license number that needs to be displayed in spaces such as online listings. In this application, the Santa Monica Home-Sharing Ordinance requires that you include all website URLs that feature advertisements of the property.

Home-sharing registry

Santa Monica also requires that those with a short-term rental business in Santa Monica whose property qualifies as “home-sharing” join the Home-Sharing Registry via the city permits office.

Transient occupancy tax

Hosts are required to remit a 17% TOT for stays that are 30 days or less.

California Airbnb laws in other cities

In this section, we provide an overview of additional locations ranging from Berkeley to West Hollywood, along with a brief guide to their short-term rental regulations. While there are some similarities in requirements with cities like Los Angeles and San Diego, the wide variety of regulations within these areas highlights the remarkable diversity in their approaches.

Berkeley

Berkeley Airbnb rules stipulate that short-term rentals are allowed only:

• If your dwelling is within an acceptable city zone
• If you hold $1,000,000 in insurance coverage for the property

Your annual rental days are not capped if you are living at the property. However, if you are not present, you cannot host more than 90 days in a calendar year.

Application fees for Berkeley short-term rental properties are $270. In addition, you’ll need to keep track of the amount to remit for both your TOT (12%) and Berkeley’s monthly enforcement fee (2%).

Beverly Hills

Beverly Hills doesn’t really do short-term rentals. The shortest rental length permitted by the city is six months, although they do allow owners to collect shorter terms of rental income twice a year (for which you’ll need to pay your TOT of 12%). You are only eligible for a single-family home; no short-term rentals are allowed in multi-unit complexes.

Malibu

All short-term rentals in Malibu are bound to the rules laid out in City Ordinance 468 and the more recent (and restrictive) City Ordinance 472, which stipulate that such rental properties must:

• Be registered with the city via application and fee ($495)
• Display their permit number (provided with the approved short-term rental application) on all advertising listings
• Pay TOT (15%)

Ordinance 472 further limits eligible short-term rental properties in Malibu by stipulating that:

• Only one unit per single-family property may be rented at a time (thus limiting the use of ADUs).
• 40%, or up to two units (whichever is smaller), in a multi-unit complex can be rented at one time.
•  The owner (host) must be on the property at all times during rentals.

Palm Springs

According to Palm Springs Ordinance 1918, short-term rental properties are possible provided you can meet the following parameters:

• There is a limit of one permit per person (meaning you can only have one short-term rental property listed at a time).
• You cannot log more than 32 separate rental bookings per year.
• You must pay a $1,072 permit fee each year you wish to operate your short-term rental.

Pasadena

According to Pasadena Airbnb rules, specifically Ordinance 7137, short-term rental properties must:

• Be a primary residence (Pasadena strictly prohibits vacation rentals), meaning you live on the property for at least 9 months of the year
• Cap short-term periods at 30 consecutive days or less, with unhosted stays a maximum of 90 nights per year
• Pay TOT (12.11%)

Note that if you own multiple units in the same complex as your primary residence, Pasadena allows you to host a short-term rental in one additional unit.

Sacramento

All short-term rentals are bound to the Sacramento County Airbnb rules laid out in City Code 5.114, which stipulates that these rental properties must:

• Be a primary residence or a secondary residence (capped at 90 rental days per year) with an accompanying short-term rental permit
• Be a secondary residence rented for more than 90 days per year with an accompanying conditional use permit
• Pay an annual business tax of $54 in addition to TOT (12%)

Santa Cruz

Santa Cruz Airbnb rules are not allowing any new unhosted short-term rental properties at this time (grandfathered ones are still in operation). However, the city’s Municipal Code (Chapter 24.12) allows for hosted short-term rental properties that:

• Hold a permit administered by the city–Santa Cruz caps their short-term rental permits at 250 and administers them on a first-come-first-served basis. (once those permits are exhausted, no additional permit applications will be considered)
• Can document that the owner lives in the home for at least six months of the year
• Do not have accessory dwelling units (ADUs) (not only are ADUs ineligible, but single-family homes with ADUs are also not eligible for a short-term rental permit in Santa Cruz)
• Pay TOT (11%)

Sunnyvale

A suburb of San Jose, Sunnyvale has some of the most limiting short-term rental laws in California.

Sunnyvale Airbnb rules signify that short-term rentals can only be operated from your primary residence (with a valid permit), and you are capped at a maximum of four occupants per single-family dwelling on a given night. Of course, TOT (12.5%) also must be collected.

West Hollywood

West Hollywood Airbnb rules restrict short-term rentals to only home-share scenarios in which you rent a part of your home to guests but stay on the same property at all times. You’ll need to apply for a Home Sharing Business license from the city and be prepared to pay your TOT (12.5%).

California cities with short-term rental bans

If you are thinking of launching your short-term rental business in any of the following cities, you might wish to reconsider. Of course, codes and laws can always change, but as it stands, these California municipalities ban these types of rentals entirely. These cities include:

• Burbank
• Hermosa Beach
• Manhattan Beach (although they are allowed in the “Coastal Zone”)
• Redondo Beach
• Sausalito

FAQs about California Airbnb laws

What does it mean to have a “primary residence”?

Your “primary residence” is the one that you live in for most of the calendar year. Different municipalities differ on the exact number of days you need to reside at that address to consider it your primary residence.

Do I need to renew my short-term rental registration every year?

This depends on the municipality in which you have a short-term rental. Some cities require annual renewal, while others renew these registrations every other year.

I am a renter in San Francisco. Can I still use my unit as a short-term rental?

Yes. It is possible in cities like San Francisco to legally list your property as a short-term rental, even if you are a tenant and not the full owner of that property.

Is a “host” the same as the short-term rental owner?

No. While these terms are often used interchangeably, there are important distinctions between the two. A “host” refers to the individual or company that manages and operates the short-term rental property. An owner is the person who actually owns the property being rented out on a short-term basis. They may choose to manage and operate their own property as a host or hire someone else.

Is a “short-term rental” and a “short-term lease” the same thing?

Not necessarily. Typically, “short-term rental” refers to the renting of a property for 30 consecutive days or less.

Is there a way to avoid TOT?

While the TOT is a standard tax cut taken for most short-term rentals, some cities offer some leeway if you rent your property on a longer-term basis. Review your local California Airbnb laws to see what your options might be.

How can I easily keep track of the TOT?

One way you can ensure you are logging the correct amount is to simply set aside the TOT percentage for your municipality when running through your accounting books each month. Sites such as Airbnb, however, can deduct these payments for you, which is a major advantage.

What are the best places in California to start a short-term rental business?

According to ikkonic, several California locations rose to the top of their rankings of best cities for a short-term rental investment. These included Santa Cruz, San Francisco, San Diego, and Los Angeles.

How much money can I make from establishing a short-term rental in California?

This number is, of course, entirely dependent on the market in which you establish your rental. Generally, the returns for those who establish a short-term rental business in California are strong. For example, Thrillist reported that in 2024, Airbnb hosts in the State of California raked in, on average, $54,461.00

What happens if I do not comply with the short-term rental ordinances as stated for my city?

There are numerous reasons we could list as to why you should make sure your short-term rental property is in compliance. Perhaps the most convincing reason, though, is money: Most cities in California will levy substantial fines on short-term rental properties they discover to be out of compliance.

For example, the city of Palm Springs holds the right to fine a short-term rental operator $5,000 upfront if a compliance violation occurs. These violations can range from major security or safety issues to clerical errors, like forgetting to add your short-term rental permit number to a home-share listing. Moreover, fines for these violations are typically levied daily. So, if you are hoping to keep your short-term business rental profitable, compliance is key.

Take a look at Lodgify

Still feeling a little overwhelmed by managing all of the ins and outs of a short-term rental business in California? Don’t worry! Lodgify makes managing the day-to-day of your short-term rental as easy as pie.

The software enables you to automate your business, grow direct bookings through your own website, and manage bookings on other sites, such as Airbnb and Vrbo, all synced through a channel manager.

Whether you are thinking of purchasing a vacation home to rent out during the winter months in San Francisco or investing in a full-time vacation rental in Los Angeles , there has rarely been a better time to grow your short-term rental business.

If you’re entering the market or expanding your business, why not try Lodgify’s vacation rental software with a 7-day free trial? Our property management software has everything you need to increase your occupancy and income.