If you want to buy an investment property in the City of Los Angeles and run it as a full-time Airbnb, the honest answer is that the city's rules do not allow it. Los Angeles limits short-term rentals to a host's primary residence. That is why most Los Angeles investors who want STR income buy outside the city, in mountain and desert markets a few hours away.
In short: LendingStreet offers short-term rental DSCR loans to Los Angeles investors, but the property usually has to be outside the City of Los Angeles. The city's Home-Sharing Ordinance allows short-term rentals only in a host's primary residence, and our investor loans are business-purpose loans on non-owner-occupied property, so a City of LA home-share is not a fit. In markets that allow investor-owned STRs, such as parts of the Big Bear and Lake Arrowhead area or the high desert near Joshua Tree, some programs let you qualify on projected short-term revenue, with loans from $150,000 and purchases up to 80% LTV.
Under the City of Los Angeles Home-Sharing Ordinance, a host may rent all or part of their home for stays of 30 days or fewer only if it is their primary residence, meaning they live there more than six months of the year. Hosts must register with the city, and units covered by the Rent Stabilization Ordinance cannot be used for home-sharing. There is an annual cap on nights unless the host qualifies for extended home-sharing.
For an investor, that rules out the most common STR plan: buying a house in Silver Lake, Venice or the Hollywood Hills and listing it full time. Because we finance only non-owner-occupied investment property, we do not lend against City of LA home-sharing income. Rules can change, so confirm current requirements with the Los Angeles Department of City Planning.
Los Angeles County has dozens of separate cities, and each sets its own rules. Several coastal and westside cities, including Santa Monica, also limit short-term rentals to hosted stays where the owner is present. Unincorporated county areas have their own registration rules. In practice, very few places in the county allow an investor to run a non-owner-occupied STR without significant restrictions.
If you find a property in the county that you believe allows investor-owned STRs, get the rule for that exact address from the city or county before you make an offer, and check HOA covenants too.
The markets most LA investors look at are within a few hours' drive, which is what makes them work: weekend guests from the Los Angeles basin. Each has its own permit system, and rules can differ between an incorporated city and the unincorporated county land around it.
| Market | Main draw | Peak demand | What to check |
|---|---|---|---|
| Big Bear Lake and Big Bear area | Skiing, lake, mountain cabins | Winter and summer weekends | City of Big Bear Lake vs San Bernardino County permits; snow load; wildfire insurance |
| Lake Arrowhead and Running Springs | Mountain lake, forest cabins | Summer and holidays | County STR permit; road access; wildfire insurance |
| Joshua Tree, Yucca Valley, Twentynine Palms | National park, desert retreats | Fall through spring | County or town permits; well and septic; summer heat |
| Palm Springs and Coachella Valley cities | Desert resort, festivals, golf | Winter and spring | City permit caps and rules; HOA restrictions |
This example is illustrative and not a quote. A Los Angeles investor buys a three-bedroom cabin in the Big Bear area for $650,000, financing 75%, or $487,500. The address is in a part of the valley where the investor has confirmed a short-term rental permit is available. A third-party projection estimates $78,000 a year in short-term revenue. Assume the program counts 80% of that, or $5,200 a month.
Estimated principal and interest on a 30-year term is about $3,409. California property tax is based on the purchase price under Proposition 13, about $596 a month in this example, and mountain insurance with wildfire coverage is budgeted at $350 a month. The total is about $4,355, for a DSCR of about 1.19x.
| Item | Amount |
|---|---|
| Purchase price | $650,000 |
| Loan at 75% LTV | $487,500 |
| Projected annual revenue | $78,000 |
| Monthly income counted (80%) | $5,200 |
| Estimated principal and interest | $3,409 |
| Property tax (monthly) | $596 |
| Insurance (monthly) | $350 |
| Total monthly payment | $4,355 |
| DSCR | 1.19x |
In mountain and desert markets, the hardest number to pin down is often insurance, not revenue. Several large insurers have pulled back from wildfire-prone areas of California, and after the January 2025 Los Angeles wildfires, coverage has become harder to find. Some owners end up combining a California FAIR Plan fire policy with a separate policy for liability and other risks.
Get a written insurance quote that covers short-term rental use before you remove your inspection contingency. If insurance costs twice what you assumed, the ratio can drop below 1.0x. Mountain cabins also need coverage for snow and freezing damage, and desert homes may need extra attention to cooling systems and pools.
A DSCR loan compares the property's income with its full monthly payment: principal, interest, taxes, insurance and HOA dues. On some STR programs, income is a third-party projection of short-term revenue for the address, often reduced for vacancy and costs. The standard minimum is 1.0x, and sub-1.0 programs exist.
Mountain and desert markets are seasonal, so the projection already reflects slow months. If it comes in below what you expected, see /str-loan-low-airdna-projection.html. For a property that has been operating for a year or more, a refinance can lean on actual booking history; see /str-dscr-refinance.html.
Short-term stays in California are subject to transient occupancy tax set by each city or county, and some areas add tourism assessments. Some platforms collect these, but you are responsible for confirming. Permit fees, inspections and occupancy limits vary by market, and some permits cap the number of guests or require a local contact who can respond quickly.
Proposition 13 sets property tax at roughly 1% of the purchase price plus local voter-approved charges, and a supplemental tax bill usually arrives after a purchase. Budget for it in your reserves.
Some investors keep a Los Angeles property and rent it furnished for 30 days or more to production crews, traveling nurses or families displaced by fires or renovations. Those stays are generally not short-term rentals under the city's ordinance, but they are tenancies, and California and Los Angeles tenant protections can apply. Talk to a local attorney before you set this up.
A furnished rental like that can support a standard DSCR loan based on market rent; see /dscr-loans-los-angeles-ca.html. To discuss an STR purchase outside the city, call (877) 298-1001 or use the form below to get a quote.
Not for full-time short-term rental use. The city allows home-sharing only in a host's primary residence, and we finance only non-owner-occupied investment property.
Commonly in the Big Bear and Lake Arrowhead area, the high desert around Joshua Tree and Yucca Valley, and Coachella Valley cities. Each has its own permits and rules.
On some programs, yes. The lender uses a third-party revenue projection for the address, often reduced for vacancy and costs.
Wildfire risk has made coverage expensive and harder to find in many California mountain and desert areas. A high premium can push the DSCR below 1.0x.
Under Proposition 13, about 1% of the purchase price plus local charges, and expect a supplemental bill after you buy.
At least confirm that a permit is available for the address and what it requires. In capped markets, get the answer in writing before you rely on STR income.
Yes. LLC borrowers are standard, and you will typically sign for the loan personally as well.
Yes. Cash-out goes up to 75% LTV, and seasoning varies by program. A track record of bookings and permits helps.
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