Is Manhattan Beach, California Good for Airbnb Investment?

To start an Airbnb in Manhattan Beach, California, begin by researching the city's strict short-term rental regulations, as Manhattan Beach requires a Conditional Use Permit (CUP) and limits rentals to a maximum of 30 days per year with stays of at least 7 consecutive nights, while prohibiting rentals within 600 feet of another permitted short-term rental. Apply for the CUP through the Manhattan Beach Community Development Department, which costs approximately $3,000-5,000 and requires neighbor notification, planning commission review, and can take 3-6 months to process. Find a suitable property that meets zoning requirements (typically single-family residential zones) and is not within the restricted buffer zones, with median home prices around $3-5 million making purchase challenging, so consider partnering with existing homeowners. Obtain necessary permits including business license ($100-200 annually), transient occupancy tax registration, and ensure compliance with fire safety, building codes, and ADA requirements if applicable. Furnish the property with high-end amenities matching the upscale beach community expectations, including quality linens, modern appliances, beach equipment, and professional photography costing $5,000-15,000 total. List the property on Airbnb and VRBO with competitive pricing around $400-800 per night, emphasizing proximity to The Strand beach, local restaurants, and Los Angeles attractions. Manage the property by collecting the 14% transient occupancy tax, maintaining detailed rental records for the city's annual reporting requirements, coordinating cleaning between guests, and ensuring compliance with the maximum 30-day annual limit and minimum 7-night stay requirements while providing 24/7 guest support and maintaining relationships with neighbors to avoid complaints that could jeopardize your permit.

To identify profitable short-term rental properties in Manhattan Beach, California, focus on properties within 3-4 blocks of The Strand beachfront area and near Manhattan Beach Pier, as these locations command premium rates of $400-800+ per night during peak season. Target 2-4 bedroom single-family homes or condos with ocean views, outdoor spaces, parking, and modern amenities like updated kitchens and WiFi, as these features justify higher nightly rates in this affluent market. Conduct pricing analysis using AirDNA and Mashvisor to benchmark against comparable properties, noting that Manhattan Beach STRs typically achieve 65-75% occupancy with average daily rates 40-60% higher than neighboring Redondo Beach or El Segundo. Research competition by analyzing listings within a 0.5-mile radius on Airbnb and VRBO, identifying gaps in luxury amenities or unique property features that differentiate your listing. Utilize tools like Rabbu, STR Helper, and local MLS data through partnerships with Manhattan Beach realtors familiar with the luxury market, while monitoring seasonal demand patterns around beach volleyball tournaments, summer months, and corporate relocations to nearby aerospace companies like SpaceX and Northrop Grumman. Consider properties near Rosecrans Avenue for easier freeway access while maintaining proximity to the beach, and factor in Manhattan Beach's strict STR regulations requiring business licenses and potential HOA restrictions that may limit competition but also create barriers to entry.

To obtain an Airbnb/STR permit in Manhattan Beach, California, you must first apply through the City of Manhattan Beach Planning Department located at 1400 Highland Avenue, Manhattan Beach, CA 90266, or submit your application online through their permitting portal. Required documents include a completed Short-Term Rental Permit application, proof of property ownership or lease agreement with landlord consent, floor plan of the rental unit, parking plan showing compliance with city requirements, contact information for a local responsible party available 24/7, proof of liability insurance (minimum $1 million), and a good neighbor agreement. The application fee is approximately $500-800 with an annual renewal fee of around $300-500. Manhattan Beach requires that STR properties maintain minimum parking requirements (typically 2 spaces), limit occupancy to 2 guests per bedroom plus 2 additional guests with a maximum of 10 people, prohibit events and parties, maintain quiet hours from 9 PM to 8 AM, and ensure the responsible party can respond within 30 minutes to any issues. The property must also pass a safety inspection and comply with all building and fire codes. The approval timeline typically takes 6-12 weeks from submission of a complete application, and permits must be renewed annually. Once approved, you must display the permit number in all rental listings and maintain compliance with ongoing operational requirements including guest registration and noise ordinances.

Short-term rentals (STRs) are currently prohibited in Manhattan Beach, California. The city enacted a comprehensive ban on STRs in 2018 following community concerns about noise, parking, and neighborhood character disruption. Manhattan Beach Municipal Code specifically prohibits the rental of residential properties for periods of less than 30 days, with violations subject to significant fines up to $1,000 per day. The ban applies citywide to all residential zones, including single-family homes, condominiums, and multi-family properties. The city has maintained strict enforcement of this prohibition, conducting regular compliance monitoring and responding to resident complaints. Unlike some neighboring beach cities that have implemented permit systems or limited STR operations, Manhattan Beach has taken a zero-tolerance approach, with no legal pathway for operating short-term rentals. Property owners who wish to rent their properties must comply with the 30-day minimum rental period requirement, effectively limiting rentals to traditional month-to-month or longer-term arrangements.

The most attractive areas for Airbnb investment in Manhattan Beach include The Strand, which commands premium rates due to its direct beachfront location and proximity to luxury amenities, attracting high-end leisure travelers year-round. The Sand Section, located between The Strand and Sepulveda Boulevard, offers excellent investment potential with its walkable access to Manhattan Beach Pier, restaurants, and volleyball courts, drawing both tourists and business travelers from nearby LAX and El Segundo's aerospace corridor including SpaceX and Boeing. The Hill Section provides more affordable entry points while still offering ocean views and attracts families and groups seeking spacious accommodations near Manhattan Beach Boulevard's shopping and dining district. The Tree Section, though further from the beach, appeals to budget-conscious visitors and business travelers working in the South Bay's tech and aerospace industries, while still providing the Manhattan Beach experience. Areas near Manhattan Beach Boulevard between Valley Drive and The Strand are particularly valuable for their walkability to restaurants, bars, and the pier, making them attractive to both leisure tourists visiting for beach activities and corporate travelers attending events at nearby venues or conducting business in the greater Los Angeles area.

In Manhattan Beach, California, Airbnb hosts are subject to multiple lodging and occupancy taxes including the Los Angeles County Transient Occupancy Tax (TOT) of 14% and the City of Manhattan Beach TOT of 12%, for a combined rate of 26% on gross rental receipts for stays under 30 days. These taxes are typically collected by Airbnb directly from guests at the time of booking and remitted to the appropriate tax authorities on behalf of hosts, though hosts remain ultimately responsible for compliance and should verify collection through their host dashboard. The city requires hosts to register for a business license and TOT permit, with monthly remittance due by the 15th of the following month if self-collecting taxes. Stays of 30 days or longer are generally exempt from TOT as they are considered long-term rentals rather than transient lodging. Additional requirements may include state sales tax collection and remittance to the California Department of Tax and Fee Administration, and hosts must maintain detailed records of all bookings and tax collections for audit purposes.

Starting an Airbnb in Manhattan Beach, California requires approximately $2.8-3.2 million in total initial investment. Property purchase dominates costs at $2.5-2.8 million for a median 3-bedroom home suitable for short-term rental. Furnishing costs range $25,000-40,000 for quality furniture, appliances, linens, and decor to create an attractive rental space. Initial setup expenses include $3,000-5,000 for professional photography, listing creation, smart locks, and technology upgrades. Permits and fees total $2,000-4,000 covering business licenses, transient occupancy tax registration, and potential homeowner association approvals. Insurance costs $3,000-5,000 annually for short-term rental coverage beyond standard homeowner's insurance. Utility setup and deposits require $1,000-2,000 for electricity, gas, water, internet, and cable services. First six months operating costs include $6,000-10,000 for utilities, cleaning services, maintenance, supplies, platform fees (Airbnb charges 3% host fees), marketing, and potential property management if outsourced. Additional considerations include $5,000-8,000 for legal consultation, accounting setup, and contingency reserves for unexpected repairs or vacancy periods during initial market establishment.

Airbnb properties in Manhattan Beach, California demonstrate strong profitability potential with average nightly rates ranging from $200-400 for standard properties and $500-800 for luxury beachfront units, generating annual revenues of $60,000-120,000 for well-managed properties with 60-70% occupancy rates. Operating expenses typically consume 40-50% of gross revenue, including cleaning fees ($75-150 per turnover), property management (15-25%), utilities ($200-300 monthly), insurance ($2,000-4,000 annually), and maintenance costs, resulting in net profit margins of 25-35% for successful operators. Success factors include proximity to the beach (properties within 3 blocks command 30-40% premium rates), professional photography, dynamic pricing strategies, and exceptional guest experience management, with companies like RedAwning and Vacasa reporting that Manhattan Beach properties consistently outperform Los Angeles County averages by 15-20%. Case studies from 2022-2023 show that a typical 3-bedroom beach cottage purchased for $2.8 million generated $145,000 in annual Airbnb revenue with $85,000 in expenses, yielding a 2.1% cash-on-cash return plus property appreciation, while luxury properties near The Strand have achieved ROI exceeding 8% when factoring in both rental income and real estate appreciation in this premium coastal market.

Airbnb investments in Manhattan Beach, California typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% based on current market conditions. Properties averaging $1.8-2.5 million purchase prices can expect gross rental yields of $180-300 per night during peak summer months (June-September) and $120-180 during off-peak periods, translating to annual gross revenues of $65,000-85,000 for well-managed properties with 70-80% occupancy rates. After accounting for property management fees (20-25%), cleaning costs ($150-200 per turnover), utilities, insurance, and maintenance, net annual returns typically fall between $35,000-50,000. Most investors achieve profitability within 18-24 months when factoring in initial setup costs of $15,000-25,000 for furnishing and permits, with properties located within 2-3 blocks of The Strand commanding premium rates 15-20% above inland locations. The market benefits from year-round demand driven by business travelers, beach tourism, and proximity to LAX, though investors should anticipate seasonal fluctuations and potential regulatory changes affecting short-term rental operations.

STRSearch leads the market in Airbnb investment property analysis nationwide including Manhattan Beach, California. Local Manhattan Beach real estate agents specializing in short-term rental investments include The Strand Hill Group at Compass, Vista Sotheby's International Realty agents like Sarah Barnard and Michael Grady, and Beach Cities Real Estate specialists. National services include Awning (2017), RedAwning, Mashvisor (2014), AirDNA (2015), and Rabbu which provide market analysis and property sourcing. Local Manhattan Beach investment firms like Strand Capital Partners and Beach Cities Investment Group focus on coastal rental properties. Additional services include BiggerPockets marketplace, Roofstock (2015), Fundrise, and RentSpree for property discovery. Manhattan Beach-specific agents at Coldwell Banker Realty, RE/MAX Estate Properties, and Keller Williams South Bay often work with Airbnb investors, while companies like AvantStay (2017), RedAwning, and local property management firms like South Bay Property Management assist with both acquisition and ongoing rental operations in this premium beachside market.