Renting out your room, apartment or house in Los Angeles on Airbnb for two to three months can help you to make an entire year’s worth of rent, according to a study.
A short term rental on Airbnb or other marketplaces for vacation homes enables homeowners to earn far more than average annual lease, per research conducted by Los Angeles Alliance for a New Economy (LAANE) and Inside Airbnb.
The report indicates that short term rentals in L.A. for only 83 days on average can generate a higher earning than the total sum a homeowner can collect through a conventional long term lease, which runs for at least a year for “permanent tenants.” Areas with higher cost of real estate in the city can even cut that period to just 60 days.
Obviously, the cost of available short term rentals on Airbnb in L.A. varies depending on the area, but Koreatown locations can charge temporary tenants for a total of 78 days on average to make up a year’s worth of rent from permanent residents, while places in North Hollywood need just 68 days. The likes of Silver Lake, Echo Park, Griffith Park and South L.A. require 79 days, followed by Downtown L.A.’s average of 88 days.
The city of Los Angeles currently places a 90-day cap on short term home rentals, but is considering an extension of the duration to 180 days.
“For the overwhelming majority of neighborhoods across L.A., a 90-day cap offers a weak incentive for landlords to rent out their units on Airbnb,” said LAANE Research & Policy Analyst Roy Samaan. “However, the currently-proposed 180 day limit offers a substantial financial incentive to rent out units on Airbnb instead of long-term tenants.”
Notably, the recently released report does not reflect that rapidly rising cost of home rental in L.A., as the data is based on the cost of living in the city in 2014. Another research in the past has mentioned that a short term rental of at least about 177 days is needed for the cost to equal a conventional long term, one-year lease.
By Soo Yeon Oh