🌴 Short-Term Rentals in the Coachella Valley: Rules, Taxes & Where They’re Allowed

Are you thinking about owning a short-term rental (STR) in the Coachella Valley? For years, vacation rentals have been a popular way for buyers to experience life in the desert—imagine having your own pool, full kitchen, and all the comforts of home. The Coachella Valley is a year-round vacation paradise with sunshine, golf, festivals, and mid-century modern architecture. It’s no surprise that many investors consider owning a property for Airbnb or short-term rentals (STRs) here. But before you buy, it’s important to understand that every city has its own rules, taxes, and permitting process—and some have banned new STRs entirely. 

🌴 Owning a Short-Term Rental in the Coachella Valley: What You Need to Know

Traditionally, many second-home buyers purchased desert properties with a straightforward plan: use the home for personal enjoyment when desired, and rent it out during your absence to offset costs or potentially earn a profit. However, times have changed, and so has the short-term rental market.

🏡 The Changing STR Landscape in the Desert

Over the past several years, short-term rentals (STRs) have faced increased regulation and pushback from residents. Some communities simply don’t want short-term rentals in their neighborhoods. The reasons often include:

• Noise complaints from late-night gatherings or pool parties

• Parking and traffic issues in quiet residential streets

• Loss of community feel with too many transient guests

• Concerns about property values and security

As a result, many cities in the Coachella Valley now have strict rules for short-term rentals (STRs), and some, such as Rancho Mirage and Cathedral City, have completely stopped issuing new permits. Make sure to conduct thorough research before purchasing a short-term rental property. Check:

1. If the property’s location qualifies for an STR permit

2. Whether permits are still available in that city or neighborhood

3. HOA rules, since many gated communities ban STRs

🌟 Tips for a Successful Short-Term Rental

Once you’ve found a property that qualifies, ensuring it becomes a profitable rental depends on providing an excellent guest experience and implementing smart marketing strategies. Here is what we have learned from our experience hosting and advising short-term rental owners:

1. Focus on Amenities That Guests Love

Guests can book a desert getaway for relaxation and fun. The most requested features include

• Pool and hot tub—a must for single-family homes

• Fire pit or outdoor lounge area—perfect for desert evenings

• Resort-style extras—golf, pickleball, tennis, or a gym, especially for seasonal renters

If your property is a condo, its proximity to downtown Palm Springs or walkable attractions can significantly impact occupancy rates.

2. Understand Seasonal Demand

• Winter & Spring (Jan–Apr): Peak season with high nightly rates

• Summer (Jun–Aug): Slower, though single-family homes with pools still attract guests

• Fall & Shoulder Months: Events like Modernism Week and Desert Trip can drive bookings

Tip: Condos near hospitals often attract traveling nurses during off-season months, while single-family homes tend to perform better year-round.

3. Know Your HOA and City Restrictions

Some homeowners associations (HOAs) limit rentals to 30 days or more, but this restriction isn’t necessarily a deal breaker. Many snowbirds and seasonal guests actually prefer month-long stays, so you can still achieve strong returns with fewer turnovers.

4. Make Marketing Easy

Leverage platforms like Airbnb and Vrbo for visibility, and take advantage of their host tools and resources, including

• Airbnb’s Superhost program for credibility

• Dynamic pricing tools to optimize rates

• Professional photography and a detailed property listing

• Prompt guest communication and positive review management

💡 Pro Host Recommendations

• Provide welcome guides with local tips and house instructions

• Include starter amenities: bottled water, coffee, and toiletries

• Offer reliable Wi-Fi and streaming services

• Respond quickly to any guest questions or issues

• Hire a local property manager if you don’t live nearby
  
  
  

  ⭐ How to Become a 5‑Star Airbnb Host in the Coachella Valley

  If you’re considering turning your Palm Springs or Coachella Valley property into a short‑term rental, success starts with creating an experience guests will rave about. Here’s how to attract more bookings, earn 5‑star reviews, and keep your Airbnb guests happy:

  1. Create a Stunning Photo Tour

  High-quality, up-to-date photos are the number one factor in attracting bookings.

  • Photograph every room and shared space in your home, including outdoor areas like patios, pools, and fire pits.

  • Upload multiple angles per room—wide, mid-range, and close-up shots of helpful details like a coffee station or universal charger.

  • Highlight special amenities such as hot tubs, fire pits, pet-friendly features, or spaces for remote workers.

  • Organize photos into a room-by-room photo tour so guests understand the home’s layout before they arrive.

• Pro Tip: Consider hiring a professional photographer. Great visuals can increase your bookings significantly.

  2. Write Clear and Honest Descriptions

  Your listing should accurately reflect what guests will experience.

  • Use a descriptive title that highlights your home’s unique features, like “Mid‑Century Retreat with Pool Near Downtown Palm Springs.”

  • Include key location details—mention proximity to hotspots like Palm Canyon Drive, golf courses, or festival grounds in Indio.

  • Avoid overselling. Guests prefer candid, specific descriptions to set realistic expectations and avoid negative reviews. Be honest in your description if, for example, the location can experience strong seasonal wind or if it gets airplane noise. If you don't disclose this types of issues upfront, you'll end up getting negative reviews that may severely affect the rentability of your rental home. 

• 3. List and Maintain All Amenities

  Guests often filter their searches by amenities.

  • Add everything you offer, from Wi-Fi, air conditioning, and pools to parking and pet‑friendly features.

  • Keep all amenities in working order—nothing ruins a 5‑star experience faster than broken features.

  • Highlight seasonal perks, like heating the pool in the winter or providing misting systems in the summer.

• 🌴 Hosting in Palm Springs: The Local Advantage

  Homes closer to Downtown Palm Springs or near resort-style amenities like golf, tennis, and pickleball often rent faster. Travelers in the Coachella Valley are looking for relaxation, sunshine, and convenience, so creating a comfortable, well‑equipped space is key to maximizing your rental income.

  By combining great photos, honest descriptions, and full amenities, you’ll increase your chances of higher occupancy rates and glowing reviews, even in competitive markets like Palm Springs.
  Check out Airbnb’s host resources:
  https://www.airbnb.com/resources/hosting-homes

Here's your updated guide to which cities allow STRs, where they are restricted, and what you need to know as an owner.

✅ Cities That Allow STRs*

Palm Springs

Palm Springs is the most famous short-term rental market in the desert and is also the most tightly regulated.

• Permits Required: Vacation Rental Certificate + Transient Occupancy Tax (TOT) registration

• Rules: Capped at about 20% of homes per neighborhood; strict noise and guest limits

• Taxes & Fees: 11.5% TOT + 1% Tourism Business Improvement District (TBID) + permit/inspection fees

• City Website: https://www.palmspringsca.gov/business/vacation-rental-information

Indio

IIndio is a prime festival city, known for hosting Coachella and Stagecoach, making short-term rentals (STRs) particularly popular during the event season.

• Permits Required: Yes, with inspections and registration

• Rules: Must comply with zoning and safety requirements under Municipal Code Chapter 37

• Taxes & Fees: 13% TOT + 1% TBID

• City Website: https://www.indio.org/shorttermrentals

Coachella (City)

The city of Coachella also permits STRs through a straightforward registration process.

• Permits Required: STR registration and TOT compliance

• Taxes & Fees: 13% Transient Occupancy Tax

• City Website: https://www.coachella.org/departments/economic-development/short-term-rentals

Desert Hot Springs

Desert Hot Springs, which is known for its mineral spas, is one of the easiest cities for owners of short-term rentals (STRs).

• Permits Required: Yes, but no current cap on total rentals

• Rules: Primarily focused on noise, safety, and neighborhood compliance

• City Website: https://planning.rctlma.org/short-term-rental-program

Palm Desert

Palm Desert allows short-term rentals but enforces strict rules and requires awareness of homeowners association regulations. 

 Temporary Moratorium in Certain Zones

• An interim ordinance (No. 1357) has put a temporary moratorium on issuing new STR permits in Planned Residential (PR) zones.

• Exceptions are made only if the property is in an HOA that explicitly permits STRs—in which case, you must provide written HOA approval.

• Permits Required: Short-Term Rental Permit + TOT registration

• Rules: Rentals under 27 nights are considered STRs; many HOAs prohibit them

• Taxes & Fees: 11% TOT

• City Website: https://www.palmdesert.gov/residents/short-term-rentals

🚫 Cities That Do Not Allow New STR Permits

Cathedral City

• Status: New STR permits have been banned since 2023 in most residential areas

• Allowed: Renewals only in limited zones or HOAs

• City Website: https://www.cathedralcity.gov/residents/short-term-vacation-rentals

Rancho Mirage

• Status: No new STR permits issued; only grandfathered properties may operate

• City Website: https://www.ranchomirageca.gov/short-term-rentals

La Quinta

• Status: General STRs are banned; only homeshare and legacy permits remain

• City Website: https://www.laquintaca.gov/business/short-term-vacation-rentals

📊 Quick Reference: Coachella Valley STR Rules*

City STRs Allowed? Permit Status TOT + Fees

🧭 Final Tips for STR Investors

1. Please review HOA regulations initially, as many desert condos and gated communities do not permit STRs.

2. Expect seasonal demand—most bookings happen in winter and spring; summer is slow. Usually, rentals book up by July for the following winter season. If you don't rent your home by July, you might be overcharging. There is a lot of competition, and you'll need to make sure your property is competitive, with good reviews, to have it appeal to potential renters.

3. Finances: Don't automatically expect your rental income to cover all your home's expenses. When preparing a budget, take into consideration the cost of furnishing the home, maintenance, property management, your utility bills, taxes, landscaping, and insurance, among other expenses.

4. Stay compliant—fines for illegal rentals can reach $5,000+ per violation.

5. Consider professional management—local STR managers can handle permits, inspections, and guest turnover.  Having a property manager to handle any issues or emergencies means you'll sleep better at night.

6. Please review the city's short-term rental policies to ensure a potential policy qualifies for a new rental permit.

7. Talk to your financial advisor to see if owning a short-term rental makes sense for your investment portfolio. 

8. Verify with your insurance broker that a property would qualify for insurance for short-term rentals. 

*Always verify the city’s current short-term rental regulations before buying.
 Rules and restrictions can change frequently, and some cities even implement temporary moratoriums on new permits. To protect your investment and ensure it meets your intended use, confirm the latest STR guidelines directly with the city where the home is located. 

🌴 My Experience Owning Short‑Term Rentals in Palm Springs

Owning short-term rentals (STRs) in the Coachella Valley has been a journey full of learning—and honestly, I prefer STRs over traditional full-time rentals. Over the years, managing my three vacation rentals has taught me a lot about what works, what to watch for, and how to make these properties a profitable long-term investment.

Why I Prefer STRs Over Full-Time Rentals

The biggest reason? Less wear and tear. When someone rents your home full-time, they move in with all their furniture, boxes, and “stuff.” With STRs, guests arrive with a suitcase and leave a week (or a month) later—so there’s a lower risk of major damage.

I’ve also found that most guests are very considerate, especially when you set clear expectations upfront. I don’t allow children in my rentals, but I do allow pets—with a $250 pet cleaning fee. Some people might think that’s high, but considering many hotels charge $100 per night per dog, I think it’s fair. Plus, travelers with fur babies are a loyal market segment. As a dog owner myself, I understand that paying a bit extra for the privilege of traveling with your pets is worth it.

How I Structure My Rentals

Two of my properties have a 30-day minimum rental period. Even so, they’re still profitable, especially during the peak season. In fact, I prefer 3-month seasonal renters, and I usually have those bookings locked in by July for the following winter.

Off-season, I often rent to:

• Homebuyers waiting on renovations to be completed

• People testing desert life before buying a home

• Traveling medical professionals working at nearby Desert Regional Hospital

These guests are fantastic—they’re busy working or exploring the area and tend to treat the home with care.

My third property has a 7-day minimum and is located in central Palm Springs. This is my most profitable rental because shorter stays command higher rates. Interestingly, I’ve had two separate guests book short-term stays and later extend to several months.

Tip: If you can find a condo with a short-term rental allowance (rare in Palm Springs), it can be an excellent investment opportunity.

The Realities of STR Ownership

While STRs can be lucrative, they’re not passive investments. Here’s what I’ve learned:

1. Permits & Taxes:

   • You need a STR permit from the city, and you’ll be required to pay Transient Occupancy Tax (TOT) and file monthly reports. (If renting for 30 days or more, this isn't required)

   • I hire a property manager to handle these tasks—regulations change often, and it’s worth paying a pro to stay compliant.

2. Profitability vs. Expenses:

   • If I had mortgages on these homes, profitability would be tight after deducting all expenses, fees, and maintenance.

   • I view these homes as long-term investments—future rental income plus property appreciation will help supplement my retirement.

3. Maintenance is Inevitable:

   • Even condos can have major expenses.

   • Both of my condos needed new AC units last year, which completely wiped out that year’s rental income.

   • Plan for cash reserves—emergencies happen, and being prepared will keep your investment safe.

4. Insurance

5. Getting insurance is getting more challenging and expensive. You'll need a short-term rental policy, which is different than a long-term rental policy. Make sure you inform your insurance broker how you intend to use the property to make certain you get the right policy. I prefer to rent all my properties through Airbnb, which includes additional insurance. For any guests renting for more than a month, I require them to have renter's insurance and name me as an additional insured for extra protection. 

6. During off-season months, I sometimes offer significant discounts on my rate to attract tenants. I would rather be generating some income rather than nothing at all. However, during summer, electrical bills can be high—mostly due to running the ac.  So, keep that in mind; if you discount your rate, you want to make sure it's still profitable after deducting utility bills. Although I haven't done it yet, adding a Nest-type thermostat that limits how low the temperature can be set is probably a good idea!

My Takeaway

Owning short-term rentals in Palm Springs and the Coachella Valley can be rewarding—but only if you go in with realistic expectations. STRs can provide flexibility, lifestyle perks, and long-term equity growth. But to succeed, you’ll need to:

• Screen guests wisely

• Stay compliant with city regulations

• Budget for unexpected expenses

For me, STRs are part of a diversified investment portfolio that I hope will support me in retirement. If you approach it strategically, hosting can be as fun as it is profitable.

🌴 Final Thoughts

Owning a short-term rental in the Coachella Valley can still be a smart investment, but it’s no longer the free-for-all it once was. By choosing the right property, following city and HOA rules, and providing an exceptional guest experience, you can create a profitable rental that delights both visitors and neighbors.

Looking for the perfect vacation rental property?
 The Paul Kaplan Group is here to help! We’ll guide you through the best neighborhoods, explain the local rental rules, and help you find homes with the strongest investment potential. Whether you’re dreaming of a cozy condo or a desert retreat with a private pool, we’ll make the process simple and stress-free. Reach out today, and let’s find your ideal short-term rental property!