Which Is Right For Your Property?
Short-term rentals are often more profitable in Mammoth Lakes thanks to its thriving tourism seasons, but long-term rentals offer greater stability for property owners.
Deciding between the two depends on your goals, but each of these come with their own set of complexities especially in a town like Mammoth.
Investors must navigate complex zoning laws, permits, and rental restrictions, all of which can vary by location and property type. On top of that, managing fluctuating demand, pricing strategies, taxes, and compliance with local regulations can quickly become overwhelming.
If navigating Mammoth’s rental regulations feels overwhelming, let us handle it for you—contact us today and let our property management expertise do the heavy lifting!
If navigating Mammoth’s rental regulations feels overwhelming, let us handle it for you—contact us today and let our property management expertise do the heavy lifting!
The main difference between short-term and long-term rentals in Mammoth Lakes is that STRs cater to vacationers with higher seasonal income potential, while LTRs offer stable, year-round housing for residents with more consistent but lower earnings.
The key differences between STR and LTR in Mammoth Lakes are:
| Category | Short-Term Rentals (STRs) | Long-Term Rentals (LTRs) |
|---|---|---|
| Income Potential | Higher seasonal income during peak ski and summer months | Steady, year-round income at a lower rate |
| Tenant Type | Vacationers and tourists | Local residents, workers or long-term residents |
| Regulations | Stricter zoning laws, permits, and duration limits with heavy enforcement in tourist-heavy zones. | Fewer restirctions, typically requiring a standard lease agreement. |
| Management | Requires active management, including guest communications, cleaning, and maintenance between bookings | Less frequent interaction with tenants and lower turnover |
| Market Demand | Influenced by seasonal tourism trends, making income more volatile. | Offers more stability due to steady housing demand year-round. |
One of the main benefits of short-term rentals is the potential for higher income.
This financial benefit can be particularly pronounced in peak seasons, significantly increasing your income potential., allowing you to enhance cash flow.
Some of the main benefits and drawbacks of short-term rentals in Mammoth Lakes are listed below:
LTR in Mammoth Lakes offers investors stable, predictable monthly income, but comes with the primary challenge of potentially lower overall revenue compared to short-term rentals.
Here is a closer look into the benefits and drawbacks of long-term rentals in Mammoth Lakes:
Both traditional and vacation rentals are profitable.
Short-term rentals (STRs) offer substantially higher revenue potential, with average annual earnings ranging from $30,000 to $100,000 depending on location and property type.
Long-term rentals provide more consistent and predictable income streams, with lower management intensity. The average annual return for traditional rentals ranges from 8-12% of property value, compared to 10-15% for STRs.
This table breaks down the factors that can affect the profitability of these rental types.
| Aspect | Short-Term Rentals (STR) | Long-Term Rentals (LTR) |
|---|---|---|
| Average Annual Revenue | $30,000 - $100,000 | 8 - 12% of property value |
| Average Daily Rate | $169 | $82 |
| Expenses (% of revenue) | 30-40% | 20 - 25% |
| Maintenance Costs | $4000 - $6000 anually | $1500 - $2500 anually |
| Income Predicatability | Variable (seasonal income gaps) | Predicatable and consistent |
| Annual ROI | 10 -15% of property value | 8-12% of property value |
The biggest risk for short term rentals is income variability and for long term rentals is problematic tenants.
While both of these options have their own risks, their potential for profitability often outweighs these risks.
Before deciding on which rental you should choose, here is a closer look at the biggest risks for short term and long term rentals.
Short-term rentals typically face higher tax rates, including occupancy taxes, which can range from 5% to 15% depending on your location. In contrast, long-term rentals often qualify for more favorable tax treatment, with lower rates and the potential for depreciation deductions.
In Mammoth, these tax implications are slightly different.
In Mammoth Lakes, STRs are subject to a 13% Transient Occupancy Tax (TOT), which falls within the 5% to 15% range mentioned. This tax applies to rentals of less than 30 consecutive days. STR operators are also responsible for reporting rental income on their state and federal tax returns and may deduct eligible expenses like maintenance and cleaning costs.
LTRs (rented for 30 days or more) are exempt from the TOT in Mammoth Lakes, providing a significant tax advantage. They also qualify for standard tax benefits, including deductions for property depreciation, mortgage interest, and other operating expenses. This makes LTRs more favorable in terms of long-term tax treatment.
In Mammoth Lakes, seasonal trends significantly influence the rental market, particularly for STRs.
Demand for STRs surges during ski season, while summer attracts vacationers interested in hiking and biking.
Although LTRs generally exhibit less sensitivity to seasonal fluctuations, they can still be impacted by changes in the local job market and housing demand.
Here are a couple of factors that you need to consider when choosing between a STR and a LTR:
Mammoth Lakes is a seasonal destination, where tourism peaks and drops which directly influences rental properties.
Short-term rentals perform well during these peak seasons, but the quieter shoulder periods can lead to lower occupancy rates.
Long-term rentals, however, provide consistent demand by meeting the housing needs of local residents and workers, offering a steady income regardless of the time of year.
If your priority is steady, predictable income, long-term rentals may be the better option.
They offer consistent cash flow through monthly rent, even during Mammoth Lakes’ slower seasons.
Conversely, short-term rentals can yield higher profits during peak tourist periods, but income may fluctuate significantly throughout the year.
Short-term rentals often require higher upfront investment to furnish and decorate the property, along with ongoing expenses like cleaning services, utilities, and frequent marketing.
In Mammoth Lakes, where travelers expect cozy, well-equipped accommodations, these costs can add up quickly.
Long-term rentals, however, typically involve fewer operating costs, as tenants often handle minor upkeep and utilities.
Mammoth Lakes’ economy heavily relies on tourism, making short-term rentals lucrative when the town sees a steady influx of visitors.
However, factors like snow levels, economic downturns, or travel restrictions could dampen tourism, directly affecting short-term rental demand.
Long-term rentals are less impacted by tourism and may provide stability regardless of these external factors.
Consider how you want to use your property. If you’d like to enjoy the home for personal vacations, a short-term rental setup allows you to block off dates for your use.
If the property is purely an investment, a long-term rental might require less hands-on management and ensure it’s occupied year-round.
Higher potential revenue, flexibility, and the ability to use your property during off-peak times.
Stable income, lower management requirements, and less wear and tear on the property.
Different cities have various rules about rentals, so it’s vital to know the local laws that impact your rental strategy.
It depends on your property, management style, and local market conditions. Generally, STRs have higher income potential, but LTRs offer stability.
STRs often require more hands-on management, including cleaning, booking, and guest support. LTRs are generally more straightforward and may require periodic maintenance and tenant communication.
What is TOT And Why Does My Airbnb Rental Need To..
Property Manager and Airbnb Host
Jessica Rivera is a dedicated property manager and Airbnb host with 10 years of experience in real estate. Based in Irvine, she excels at creating exceptional guest experiences and helping property owners maximize their rental income.
Disclaimer:
The property images featured in this blog are sourced from Realtor.com, Zillow and Airbnb and are used for illustrative purposes only. All rights to these images remain with their respective owners. If you are the copyright holder and wish to have an image removed, please contact us through our website.
Join our mailing list and receive special offers, updates, and discounted packages directly to your email.
By clicking “Submit”, you are signing up to receiving emails from us. You can unsubscribe whenever you like. SMS rates may apply.
Explore our blog for expert tips, best practices, and insights that can elevate your rental game.
Join our mailing list and receive special offers and important marketing information directly to your email.
By clicking “Submit”, you are signing up to recieving emails from us. You can unsubscribe whenever you like.
