Is Los Angeles, California Good for Airbnb Investment?

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Los Angeles, California Airbnb Investment Overview

Is Airbnb a Good Investment in Los Angeles, California?

Investing in Airbnb properties in Los Angeles, California, presents a mixed but potentially lucrative opportunity, influenced by dynamic market conditions, robust tourism, and high property values. While Los Angeles remains a top global tourist destination, attracting millions annually with its entertainment industry, beaches, and cultural attractions, stringent and evolving short-term rental regulations, particularly the Home-Sharing Ordinance, can significantly impact profitability by limiting rental days and requiring permits. Property values in Los Angeles are among the highest in the nation, leading to substantial upfront investment costs, which necessitates careful financial analysis to ensure a viable return on investment. Despite these challenges, strategic investors focusing on legal compliance, targeting high-demand neighborhoods, and offering unique guest experiences can still find success, leveraging the city's consistent visitor influx and diverse demand drivers like business travel, events, and leisure tourism.

How Much Does an Average Airbnb Earn in Los Angeles?

According to various industry reports and rental analytics platforms, Airbnb hosts in Los Angeles earn an average monthly revenue ranging from $2,800 to $4,500, with entire homes typically generating $3,200 to $5,800 per month while private rooms average $1,800 to $3,200 monthly. Seasonal variations show peak earnings during summer months and major events, with revenue increases of 25-40% above baseline rates, while winter months typically see 15-20% decreases except during holiday periods. Key factors affecting earnings include property location (with beachfront areas like Santa Monica and Venice commanding premium rates 30-50% higher than inland neighborhoods), property type and amenities, guest capacity, host responsiveness and review ratings, with Superhosts typically earning 15-25% more than average hosts. Occupancy rates across the city average 65-75% annually, with nightly rates ranging from $85-150 for private rooms and $150-350 for entire properties depending on location and seasonality, according to data from rental market research firms and hospitality analytics companies.

Airbnb Return on Investment in Los Angeles

Airbnb investments in Los Angeles typically generate an average ROI of 8-12% annually, with prime locations in Santa Monica, Hollywood, and Beverly Hills achieving returns up to 15-18%, while properties in average neighborhoods see 6-10% returns. The average payback period for initial investment ranges from 7-10 years, depending on property acquisition costs which average $800,000-$1.2 million for suitable investment properties. Daily rates in desirable areas average $150-300 per night with occupancy rates of 65-75% annually, generating monthly gross revenues of $3,000-6,500 per property. Compared to traditional long-term rentals in Los Angeles, which typically yield 4-6% annually with average monthly rents of $2,500-4,000, Airbnb investments can provide 40-80% higher returns but require significantly more active management, higher operating expenses including cleaning fees, utilities, and platform commissions of 15-20%, and face regulatory challenges with the city's strict short-term rental ordinances limiting rentals to primary residences in many areas, making legal compliance a critical factor in actual profitability.

Average Airbnb Occupancy Rate in Los Angeles

Los Angeles Airbnb occupancy rates average approximately 65-70% annually, with significant seasonal variations that peak during summer months (June-August) at around 75-80% occupancy and dip to their lowest during winter months (January-February) at roughly 55-60%. The city experiences secondary peaks during major events like award seasons (February-March) and holiday periods, while spring and fall maintain moderate occupancy levels around 65-70%. Los Angeles consistently outperforms both California's statewide average of approximately 60-65% and the national average of 55-60%, largely due to its year-round tourist appeal, business travel demand, and diverse attractions including beaches, entertainment industry, and cultural venues. The city's occupancy rates are particularly strong in popular neighborhoods like Santa Monica, Hollywood, and Beverly Hills, which can achieve occupancy rates 10-15 percentage points higher than the city average, while more residential areas tend to align closer to the overall metropolitan average.

Best Neighborhoods for Airbnb in Los Angeles

The best Airbnb investment neighborhoods in Los Angeles include West Hollywood, which commands premium rates due to its proximity to Sunset Strip nightlife, trendy restaurants, and central location between Beverly Hills and Hollywood, attracting affluent tourists and business travelers. Venice offers strong rental potential with its iconic boardwalk, beach access, and bohemian culture drawing both domestic and international visitors seeking the quintessential LA beach experience. Hollywood provides consistent demand from tourists wanting to stay near the Walk of Fame, TCL Chinese Theatre, and entertainment industry landmarks, though competition is high. Santa Monica delivers excellent pricing power with its world-famous pier, Third Street Promenade, and prime beachfront location, appealing to families and luxury travelers despite higher property costs. Beverly Hills attracts high-end guests willing to pay premium rates for prestige and proximity to Rodeo Drive shopping and upscale dining. Silver Lake appeals to younger demographics and creative professionals with its hipster culture, trendy coffee shops, and music venues, offering good returns in a gentrifying area. Downtown LA has emerged as a strong market due to urban revitalization, proximity to Staples Center and cultural attractions, plus appeal to business travelers, though the area requires careful property selection due to varying neighborhood conditions.

Short-term Rental Regulations in Los Angeles

Los Angeles requires short-term rental operators to obtain a Home-Sharing Registration Certificate through the city's online portal, with annual renewal fees of approximately $89 for primary residences and $725 for non-primary residences. Properties must be owner-occupied primary residences for rentals under 30 days, with owners required to live on-site at least 6 months per year, though non-primary residences can operate as short-term rentals for 120 days annually with higher fees and stricter requirements. Occupancy is limited to 2 guests per bedroom plus 2 additional guests, with a maximum of 8 overnight guests total, and rentals are prohibited in rent-stabilized units built before 1978. The registration process requires proof of residency, property ownership documentation, liability insurance of at least $500,000, and compliance with fire safety requirements including smoke and carbon monoxide detectors. Zoning restrictions generally permit home-sharing in residential zones but prohibit it in certain areas near airports and sensitive zones, while recent regulatory changes have included stricter enforcement mechanisms, increased penalties for violations up to $20,000, enhanced neighbor complaint processes, and requirements for platforms like Airbnb to verify host registration numbers before listing properties.

Short-term Rental Fees and Taxes in Los Angeles

Short-term rentals in Los Angeles, California are subject to multiple fees and taxes including a 14% Transient Occupancy Tax (TOT) collected by the city, which consists of the base TOT rate that has increased over recent years. Property owners must pay a $89 annual registration fee to obtain a Home-Sharing Registration, plus additional fees for inspections if required. The city also charges a $725 initial application fee for new short-term rental permits in certain zones. Properties must comply with business tax requirements which can range from $34 to $1,200 annually depending on gross receipts. Additionally, hosts may be subject to California state income taxes on rental income, and properties in certain Business Improvement Districts may face additional assessment fees ranging from 1-3% of gross receipts. Fire safety inspection fees can cost between $150-$400 depending on property type and size, and some properties may require additional permits costing $100-$300 each for specific compliance requirements.

Is Airbnb a Good Investment in Los Angeles, California?

Investing in Airbnb properties in Los Angeles, California, presents a mixed but potentially lucrative opportunity, influenced by dynamic market conditions, robust tourism, and high property values. While Los Angeles remains a top global tourist destination, attracting millions annually with its entertainment industry, beaches, and cultural attractions, stringent and evolving short-term rental regulations, particularly the Home-Sharing Ordinance, can significantly impact profitability by limiting rental days and requiring permits. Property values in Los Angeles are among the highest in the nation, leading to substantial upfront investment costs, which necessitates careful financial analysis to ensure a viable return on investment. Despite these challenges, strategic investors focusing on legal compliance, targeting high-demand neighborhoods, and offering unique guest experiences can still find success, leveraging the city's consistent visitor influx and diverse demand drivers like business travel, events, and leisure tourism.

How Much Does an Average Airbnb Earn in Los Angeles?

According to various industry reports and rental analytics platforms, Airbnb hosts in Los Angeles earn an average monthly revenue ranging from $2,800 to $4,500, with entire homes typically generating $3,200 to $5,800 per month while private rooms average $1,800 to $3,200 monthly. Seasonal variations show peak earnings during summer months and major events, with revenue increases of 25-40% above baseline rates, while winter months typically see 15-20% decreases except during holiday periods. Key factors affecting earnings include property location (with beachfront areas like Santa Monica and Venice commanding premium rates 30-50% higher than inland neighborhoods), property type and amenities, guest capacity, host responsiveness and review ratings, with Superhosts typically earning 15-25% more than average hosts. Occupancy rates across the city average 65-75% annually, with nightly rates ranging from $85-150 for private rooms and $150-350 for entire properties depending on location and seasonality, according to data from rental market research firms and hospitality analytics companies.

Airbnb Return on Investment in Los Angeles

Airbnb investments in Los Angeles typically generate an average ROI of 8-12% annually, with prime locations in Santa Monica, Hollywood, and Beverly Hills achieving returns up to 15-18%, while properties in average neighborhoods see 6-10% returns. The average payback period for initial investment ranges from 7-10 years, depending on property acquisition costs which average $800,000-$1.2 million for suitable investment properties. Daily rates in desirable areas average $150-300 per night with occupancy rates of 65-75% annually, generating monthly gross revenues of $3,000-6,500 per property. Compared to traditional long-term rentals in Los Angeles, which typically yield 4-6% annually with average monthly rents of $2,500-4,000, Airbnb investments can provide 40-80% higher returns but require significantly more active management, higher operating expenses including cleaning fees, utilities, and platform commissions of 15-20%, and face regulatory challenges with the city's strict short-term rental ordinances limiting rentals to primary residences in many areas, making legal compliance a critical factor in actual profitability.

Average Airbnb Occupancy Rate in Los Angeles

Los Angeles Airbnb occupancy rates average approximately 65-70% annually, with significant seasonal variations that peak during summer months (June-August) at around 75-80% occupancy and dip to their lowest during winter months (January-February) at roughly 55-60%. The city experiences secondary peaks during major events like award seasons (February-March) and holiday periods, while spring and fall maintain moderate occupancy levels around 65-70%. Los Angeles consistently outperforms both California's statewide average of approximately 60-65% and the national average of 55-60%, largely due to its year-round tourist appeal, business travel demand, and diverse attractions including beaches, entertainment industry, and cultural venues. The city's occupancy rates are particularly strong in popular neighborhoods like Santa Monica, Hollywood, and Beverly Hills, which can achieve occupancy rates 10-15 percentage points higher than the city average, while more residential areas tend to align closer to the overall metropolitan average.

Best Neighborhoods for Airbnb in Los Angeles

The best Airbnb investment neighborhoods in Los Angeles include West Hollywood, which commands premium rates due to its proximity to Sunset Strip nightlife, trendy restaurants, and central location between Beverly Hills and Hollywood, attracting affluent tourists and business travelers. Venice offers strong rental potential with its iconic boardwalk, beach access, and bohemian culture drawing both domestic and international visitors seeking the quintessential LA beach experience. Hollywood provides consistent demand from tourists wanting to stay near the Walk of Fame, TCL Chinese Theatre, and entertainment industry landmarks, though competition is high. Santa Monica delivers excellent pricing power with its world-famous pier, Third Street Promenade, and prime beachfront location, appealing to families and luxury travelers despite higher property costs. Beverly Hills attracts high-end guests willing to pay premium rates for prestige and proximity to Rodeo Drive shopping and upscale dining. Silver Lake appeals to younger demographics and creative professionals with its hipster culture, trendy coffee shops, and music venues, offering good returns in a gentrifying area. Downtown LA has emerged as a strong market due to urban revitalization, proximity to Staples Center and cultural attractions, plus appeal to business travelers, though the area requires careful property selection due to varying neighborhood conditions.

Short-term Rental Regulations in Los Angeles

Los Angeles requires short-term rental operators to obtain a Home-Sharing Registration Certificate through the city's online portal, with annual renewal fees of approximately $89 for primary residences and $725 for non-primary residences. Properties must be owner-occupied primary residences for rentals under 30 days, with owners required to live on-site at least 6 months per year, though non-primary residences can operate as short-term rentals for 120 days annually with higher fees and stricter requirements. Occupancy is limited to 2 guests per bedroom plus 2 additional guests, with a maximum of 8 overnight guests total, and rentals are prohibited in rent-stabilized units built before 1978. The registration process requires proof of residency, property ownership documentation, liability insurance of at least $500,000, and compliance with fire safety requirements including smoke and carbon monoxide detectors. Zoning restrictions generally permit home-sharing in residential zones but prohibit it in certain areas near airports and sensitive zones, while recent regulatory changes have included stricter enforcement mechanisms, increased penalties for violations up to $20,000, enhanced neighbor complaint processes, and requirements for platforms like Airbnb to verify host registration numbers before listing properties.

Short-term Rental Fees and Taxes in Los Angeles

Short-term rentals in Los Angeles, California are subject to multiple fees and taxes including a 14% Transient Occupancy Tax (TOT) collected by the city, which consists of the base TOT rate that has increased over recent years. Property owners must pay a $89 annual registration fee to obtain a Home-Sharing Registration, plus additional fees for inspections if required. The city also charges a $725 initial application fee for new short-term rental permits in certain zones. Properties must comply with business tax requirements which can range from $34 to $1,200 annually depending on gross receipts. Additionally, hosts may be subject to California state income taxes on rental income, and properties in certain Business Improvement Districts may face additional assessment fees ranging from 1-3% of gross receipts. Fire safety inspection fees can cost between $150-$400 depending on property type and size, and some properties may require additional permits costing $100-$300 each for specific compliance requirements.

* The data on this page is pulled from various internet sources, it is not individually verified by our investment team. To get the most up to date data and insights, please contact the STRSearch team directly.

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Everything Smart Investors Ask About STR Wealth Building

How to start an Airbnb in Los Angeles, California?

To start an Airbnb in Los Angeles, California, begin by researching the city's Home-Sharing Ordinance (HSO) implemented in 2019, which requires hosts to register with the Los Angeles Department of City Planning and obtain a Home-Sharing Registration Certificate, limiting rentals to primary residences for a maximum of 120 days per year for entire-home listings or unlimited for shared-home listings. Apply for your registration through the city's online portal, paying the required fees (approximately $89 annually), and ensure compliance with zoning laws, as short-term rentals are prohibited in certain areas like rent-stabilized units built before 1978. Find a suitable property that meets HSO requirements, preferably in tourist-friendly neighborhoods like Hollywood, Santa Monica, or Downtown LA, ensuring it's your primary residence and checking HOA or lease restrictions. Furnish the space with quality essentials including comfortable bedding, kitchen supplies, WiFi, and safety equipment like smoke detectors and fire extinguishers, while considering LA's year-round mild climate for outdoor amenities. Create your Airbnb listing with professional photos, competitive pricing based on local market rates ($80-300+ per night depending on location and size), and highlight nearby attractions like beaches, entertainment venues, and public transportation access. Manage your property by maintaining cleanliness standards, responding promptly to guests, coordinating check-ins/check-outs, and staying compliant with city reporting requirements including quarterly revenue reports and maintaining proper insurance coverage, while monitoring occupancy limits and neighbor relations to avoid violations that could result in fines up to $20,000.

What's the best way to identify good STR properties in Los Angeles, California?

To identify profitable short-term rental properties in Los Angeles, California, focus on high-demand neighborhoods like West Hollywood, Santa Monica, Beverly Hills, Hollywood, Venice Beach, and areas near LAX airport, prioritizing locations within walking distance of beaches, entertainment venues, restaurants, and public transportation. Target properties with 2-4 bedrooms, modern amenities, parking spaces, outdoor areas like patios or pools, fast WiFi, and unique architectural features that photograph well for listings. Conduct pricing analysis using AirDNA and Mashvisor to research average daily rates ($150-400+ depending on area), occupancy rates (typically 60-75% in prime locations), and seasonal demand patterns, while calculating potential revenue against mortgage, property taxes, HOA fees, and the city's 14% transient occupancy tax. Research competition by analyzing similar properties within a 1-mile radius on Airbnb and VRBO, studying their pricing strategies, amenities, guest reviews, and booking calendars to identify market gaps. Utilize LA-specific tools including the city's Home-Sharing Registration system for compliance requirements, STR Helper for permit tracking, Beyond Pricing for dynamic pricing optimization, and local property management companies like RedAwning or Vacasa for market insights, while monitoring neighborhood-specific Facebook groups and consulting with LA-based STR-focused real estate agents who understand zoning restrictions and the city's host registration requirements.

How to get an Airbnb permit in Los Angeles, California?

To obtain an Airbnb/STR permit in Los Angeles, California, you must first register with the City of Los Angeles Planning Department through their online Home-Sharing Registration system at planning.lacity.org, where you'll need to create an account and complete the registration application. Required documents include proof of property ownership or lease agreement with landlord consent, a valid government-issued photo ID, proof of primary residence (utility bills, voter registration, or tax documents), liability insurance coverage of at least $500,000, and a floor plan of the unit. The registration fee is approximately $89 annually, with additional fees for inspections if required. The timeline typically takes 4-6 weeks for processing once all documents are submitted and approved. Los Angeles-specific requirements include that the property must be your primary residence where you live at least 6 months per year, you can only rent the entire unit for a maximum of 120 days per year, you must maintain a business tax registration certificate from the City of Los Angeles, comply with all zoning regulations, provide emergency contact information to neighbors, maintain guest records, and ensure compliance with building and safety codes. Additionally, you must renew your registration annually and may be subject to random inspections by city officials to verify compliance with all regulations.

Is it legal to operate a short-term rental in Los Angeles, California?

Short-term rentals (STRs) are legal in Los Angeles, California, but operate under strict regulations established by the city's Home-Sharing Ordinance that took effect in 2019. The ordinance requires hosts to register with the city, obtain permits, and pay registration fees, while limiting rentals to primary residences only - meaning hosts must live in the property for at least 6 months per year. STRs are prohibited in rent-stabilized units (built before 1978) and in certain zones, with additional restrictions in coastal areas and specific neighborhoods. The city caps the total number of STR permits and requires hosts to collect transient occupancy tax, maintain liability insurance, and follow noise and occupancy limits. Recent changes include increased enforcement efforts, higher penalties for violations, and ongoing discussions about further restrictions, particularly regarding impacts on housing availability and neighborhood character, with the city continuing to refine regulations through 2023-2024 to balance tourism benefits with housing preservation concerns.

What are the best places to invest in Airbnb in Los Angeles, California?

The best Airbnb investment areas in Los Angeles include West Hollywood for its vibrant nightlife, proximity to Sunset Strip, and high demand from entertainment industry visitors; Santa Monica for beach tourism, the pier, and consistent year-round bookings from leisure travelers; Beverly Hills for luxury tourism and business travelers seeking upscale accommodations near Rodeo Drive; Hollywood for entertainment tourism with visitors wanting to stay near Walk of Fame, TCL Chinese Theatre, and major studios; Venice for the bohemian beach culture, boardwalk attractions, and tech workers from nearby Silicon Beach companies like Google and Snapchat; Downtown LA (DTLA) for business travelers, convention center events, and the growing arts district; Melrose area for shopping tourism and Instagram-worthy locations; Los Feliz for visitors seeking trendy neighborhoods near Griffith Observatory; Manhattan Beach for upscale beach tourism and corporate travelers from nearby aerospace companies; and Culver City for its proximity to major studios like Sony Pictures, Amazon Studios, and Apple, attracting entertainment industry professionals and tourists visiting studio tours.

Airbnb and lodging taxes in Los Angeles, California

In Los Angeles, California, Airbnb hosts must collect and remit several lodging taxes including the City of Los Angeles Transient Occupancy Tax (TOT) of 14% on stays under 30 days, which applies to the total rental amount including cleaning fees, and the Los Angeles County tax of 12% for unincorporated areas. The City TOT is collected by Airbnb directly from guests and remitted to the city on behalf of hosts through their automated collection system, while hosts must register with the city's Office of Finance and obtain a TOT certificate. Additionally, hosts may be subject to California state sales tax of 7.25% plus local district taxes that can bring the total to around 9.5-10.75% depending on the specific location within LA County. Airbnb typically handles the collection and remittance of these taxes automatically for hosts, but hosts remain ultimately responsible for compliance and must file quarterly returns with the city even when using Airbnb's collection service. Stays of 30 days or longer are generally exempt from TOT as they're considered residential rather than transient occupancy, and certain exemptions may apply for government employees or qualifying disabled veterans, though documentation is required.

Total cost to purchase, furnish and operate an Airbnb in Los Angeles, California

Starting an Airbnb in Los Angeles, California requires approximately $850,000-$950,000 in total initial investment. Property purchase costs average $750,000 for a median 2-bedroom condo or small home suitable for short-term rentals in desirable neighborhoods like Hollywood, Santa Monica, or West Hollywood. Furnishing costs range $15,000-$25,000 for quality furniture, appliances, linens, and décor to create an attractive listing. Initial setup expenses include $2,000-$3,000 for professional photography, listing optimization, smart locks, and welcome amenities. Los Angeles requires a short-term rental permit costing $89 annually, plus business license fees of $300-$500, and potential HOA approval processes. Insurance premiums for short-term rental coverage average $2,500-$4,000 annually through companies like Proper Insurance or CBIZ. Utility setup and deposits for electricity, gas, water, internet, and cable total approximately $1,500-$2,500. First six months of operating costs include utilities ($1,200), cleaning services ($3,600 at $150 per turnover), Airbnb host fees (3% of bookings, estimated $4,500), property management software ($300), restocking supplies ($800), maintenance reserves ($2,000), and marketing expenses ($1,000), totaling roughly $13,400 for the initial operating period.

Are Airbnb properties in Los Angeles, California profitable?

Airbnb properties in Los Angeles, California demonstrate strong profitability potential with average annual revenues ranging from $35,000-$85,000 depending on location and property type, while expenses typically consume 40-60% of gross revenue including cleaning fees ($75-150 per turnover), property management (15-25%), utilities ($200-400 monthly), insurance ($1,500-3,000 annually), and maintenance costs. Properties in prime areas like Venice Beach, Hollywood Hills, and Santa Monica achieve profit margins of 25-45%, with successful hosts like those operating luxury properties in Beverly Hills reporting net profits exceeding $50,000 annually on single units. Key success factors include strategic location within 5 miles of major attractions, professional photography increasing bookings by 30-40%, dynamic pricing strategies, maintaining 4.8+ star ratings, and offering unique amenities like pools or city views. Case studies from 2022-2023 show that hosts who invested in smart home technology and partnered with professional cleaning services achieved 20% higher occupancy rates and commanded premium pricing 15-25% above market average, while properties near LAX and downtown entertainment districts consistently outperformed suburban listings by 35-50% in revenue generation.

What is the expected return on investment for an Airbnb in Los Angeles, California?

Airbnb investments in Los Angeles, California typically generate annual ROI of 8-15% depending on property location and type, with prime areas like West Hollywood, Santa Monica, and Beverly Hills achieving the higher end of this range. Cash-on-cash returns generally fall between 6-12% annually, with short-term rental properties in desirable neighborhoods near beaches, entertainment districts, or business centers performing best. Properties in areas like Venice, Hollywood, and Downtown LA often reach profitability within 18-24 months, while those in premium locations may take 12-18 months due to higher occupancy rates averaging 65-80% annually. The Los Angeles market benefits from year-round tourism, business travel, and entertainment industry demand, with average daily rates ranging from $150-400 depending on property size and location. Investors typically see break-even on initial investment and setup costs within the first 2-3 years, with properties in high-demand areas like Malibu, Brentwood, and West LA commanding premium rates that can push annual returns toward 12-18% for well-managed properties with strong online reviews and strategic pricing.

What company can help me find and buy a profitable Airbnb in Los Angeles, California?

STRSearch is a leading national platform that specializes in identifying profitable short-term rental properties for investors in Los Angeles, California. Local Los Angeles-based services include RedAwning Property Management, which offers Airbnb investment consulting, and LA Short Term Rental Advisors, founded in 2019. National companies serving the LA market include AirDNA (established 2015), which provides market analytics and property recommendations, Mashvisor (2014) offering investment property analysis tools, and BiggerPockets, which connects investors with local agents specializing in short-term rentals. Real estate agents like Sarah Chen with Compass Real Estate and Michael Rodriguez from Keller Williams Beverly Hills focus specifically on Airbnb investment properties. Additional services include HostGPO for property management, Awning (2020) for full-service Airbnb investing, and local consultants like Venice Beach Vacation Rentals and Hollywood Hills STR Consulting. Roofstock and Arrived Homes also facilitate remote Airbnb property investments in the Los Angeles market, while local property management companies like RedAwning and Vacasa help investors maximize their rental income through professional hosting services.

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