Which Is Right For Your Mammoth Lakes Property?
Choosing between short-term rentals (STR) and long-term rentals (LTR) can be difficult for investors, especially in Mammoth Lakes: For example, a STR can bring in higher income compared to traditional long-term rentals, but not all properties are zoned for nightly rentals in Mammoth Lakes, so finding an STR zoned for nightly rentals is a crucial first-step.
According to Statista, the vacation rental market is projected to grow to $24.78 billion by 2028, this makes investing in rentals a smart investment.
With close to twenty years in the hospitality and property industry, I understand the rental market and the complexities that come with it. This experience allows me to offer clear, strategic advice for both short-term and long-term rental decisions.
In this guide, I’ll help you compare STR and LTR so you can determine which rental option is best for you.
A short-term rental typically involves leases that last from a few days to a few months, while traditional rentals usually involve fixed leases of 12 months or more.
Here is a more in-depth comparison between STR and LTR:
What’s considered a short-term rental can vary by region, but generally, it includes vacation homes, serviced apartments, and even month-to-month leases under a rental agreement.
When you’re renting for the short term, you can benefit from increased flexibility and potentially higher returns on your rental property investment and higher nightly rates.
Common short-term rentals include properties listed on platforms like Airbnb and Vrbo. These platforms have revolutionized the short-term vacation rental market, providing property owners with new income opportunities.
Unlike traditional leases, short-term renting allows property owners to adjust rental rates based on market demand, providing an opportunity for enhanced profitability.
However, it’s also important to acknowledge the potential for inconsistent income due to fluctuations in occupancy rates.
Traditional rentals are typically defined as properties leased for extended periods, under fixed lease agreements. Any rental that is leased for more than a year is generally classified as a LTR.
Long-term renting creates predictable cash flow for property owners but can limit your flexibility by tying up money in one property, making it hard to change plans.
These rentals lock in prices, prevent quick property updates, and stop investors from switching to better opportunities.
Investors get a stable investment opportunity but lose the ability to quickly adjust their investments based on market changes.
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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 (STRs) | Long-Term Rentals (LTRs) |
|---|---|---|
| Average Annual Revenue | $30,000 - $100,000 | 8-12% of property value |
| Average Daily Rate (ADR) | $169 | $82 |
| Occupancy Rate | 48-55% (seasonal variability) | Stable, year-round |
| Expenses (% of Revenue) | 30-40% | 20-25% |
| Maintenance Costs | $4,000 - $6,000 annually | $1,500 - $2,500 annually |
| Cleaning Costs | $75 - $150 per turnover | Minimal (lower turnover) |
| Marketing Costs | Higher (frequent advertising) | Lower (minimal ongoing costs) |
| Turnover Costs | High (frequent guest turnover) | Low (12-month lease terms) can be an attractive option for long-term rental properties, ensuring consistent income for landlords. |
| Income Predictability | Variable (seasonal income gaps) | Predictable and consistent |
| Annual ROI | 10-15% of property value | 8-12% of property value |
| Tax Complexity | Higher (more deductions for STR-specific expenses) | Simpler tax reporting |
| Management Intensity | High (frequent maintenance and guest interactions) | Low (steady lease management) |
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.
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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.
Here’s a quick comparison of tax considerations:
| Aspect | Short-Term Rentals (STRs) | Long-Term Rentals (LTRs) |
|---|---|---|
| Tax rates can significantly impact the profitability of rental properties, especially when considering deductions for short-term vacation rentals. | Higher (5%-15% occupancy or lodging tax, where applicable) | Lower overall tax rates (standard rental income tax) |
| Depreciation is a key factor in calculating tax benefits for rental properties, allowing owners to reduce their taxable income over time. | Limited depreciation options for personal-use properties | Full depreciation allowed; highly beneficial for reducing taxable income |
| Deductions | Fewer eligible expenses, mainly related to operational costs | More deductions are available for rental property owners, including mortgage interest, property taxes, and repairs, which can enhance overall profitability. |
| Reporting Frequency | Often more frequent (monthly/quarterly for occupancy taxes) | Annual reporting suffices for most purposes |
| Compliance Complexity | Higher due to local STR regulations and additional taxes | Simpler, with fewer local regulations and reporting requirements |
When evaluating the best investment for you between short-term and long-term rentals, it’s crucial to analyze your financial goals, market conditions, and personal preferences.
Here’s a closer look into these factors:
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Mammoth Lakes has strict STR ordinances that limit the number of permits and require specific business licenses. Property owners must obtain a permit from Mono County, maintain liability insurance, and comply with local occupancy and noise regulations.
Management costs for short-term rentals in Mammoth Lakes range from 25-35% of rental income, reflecting the specialized services required for these types of properties.
To market your short stay rental effectively in Mammoth Lakes, highlight its proximity to Mammoth Mountain, the Lakes Basin, and other local attractions like Lake Mary. Use professional photos, detailed descriptions, and list on platforms like Airbnb and VRBO to target outdoor enthusiasts year-round.
Short-term rental owners must pay a 14% Mono County Transient Occupancy Tax and report rental income on California state taxes. Owners can potentially deduct expenses like maintenance, cleaning, utilities, and property management fees.
Offering both STR and LTR allows you to maximize income based on the season. Short-term rentals cater to tourists during peak seasons, while long-term rentals provide stable, year-round income, especially for seasonal workers and locals, highlighting the pros and cons of each rental strategy.
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. As an Airbnb Superhost, Jessica’s attention to detail and commitment to hospitality set her apart in the industry.
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Email: owners@fivestarlodging.com
148 Mountain Blvd, Mammoth Lakes, CA 93546
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