This month Kevin Lehman of Blue Horizon Management has written about land lording on the Mesa.
Every part of our town has its charm, and the Mesa has been especially popular over the last few years. This popularity elevates home values and rental rates. Rental properties are great financial assets, an investment that provides someone a home. This is a wonderful gift, and it should not be taken lightly. Selecting the right rental price for your investment is important. Location, amenities, and finishes all have an impact on pricing.
Increasing the rental value of your property typically involves a significant financial investment. Renters are looking for the same finishes in a home that most home buyers seek, including modern kitchens, updated bathrooms, stainless steel appliances, hard surfaced floors, dual paned windows, etc.
One of the lowest cost, highest impact things you can do to increase your rental rate is to allow pets. Many people consider these furry buddies to be like family. Although Santa Barbara is very dog friendly, finding a home that allows them is challenging. These tenants are often willing to pay more in rent, $50-$500/month, if the owners allow cats or dogs.
We recommend that owners be flexible on their pet policies, as it can provide a significantly higher rate of return. If your investment is in a Common Interest Development (HOA), you will need to confirm if and how many pets are allowed in your Community.
Below are the baseline rental values for properties on the Mesa, which include apartment units. Most homes rent significantly high than the values shown below:
Blue Horizon Management Company specializes in the management of long-term rental unitsand Common Interest Developments (HOAs). “We connect great people to great properties.”
Mesa Market Report
Maybe Not Risky – Short Term Rentals (STRs) on The Mesa
This response from Theo Kracke takes issue with June’s newsletter. Kracke successfully sued the City of S.B. to reinstate the legality of STRs below Cliff Drive, in the Coastal Zone, on the Mesa.
Dear Scott, Your recent article titled “Taking a Risk on Short Term Rentals (STR)” implied that it is “risky” to resume STR operations at homes in the Coastal Zone of the Mesa. That is not true. There is no risk to resuming the STR business in the Coastal Zone of SB City. The City has expressly stated it will not be enforcing zoning violations against STRs in the Coastal Zone of SB City. The City Attorney even put this on record in our most recent court hearing in May 2019. Therefore, STRs in the Coastal Zone of the City are currently allowed and will continue to be allowed for the foreseeable future.
There is a possibility that the City could appeal the judge’s rulings. However, it is unlikely that an appeal will “stay” the judge’s ruling during the appeal. Presently, the City is not issuing new business licenses to STR operators, nor allowing them to collect Transient Occupancy Tax (TOT)for their rentals. However, as stated above, they are not enforcing zoning violations against STRs in the Coastal Zone of the Mesa.
Sincerely, Theo Kracke
No penalty is the key. The door is open for homeowners to start renting STRs again in the Coastal Zone since the City is not enforcing STRs as zoning violations. STR’s can only operate in the Coastal Zone, basically the area between Cliff Drive and the ocean. In the past the City has collected the TOT retroactively, including penalties and interest. Should you decide to start or resume an STR,it would be wise to hold onto the 12% TOT, should there be a day of reckoning.
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