Is Buying a Vacation Rental in Monterey County a Smart Investment? What National Articles Get Wrong

Is Buying a Vacation Rental in Monterey County a Smart Investment?
What National Articles Get Wrong

Thinking about buying a vacation rental in Monterey County? Before you invest, get the facts on occupancy rates, short-term rental laws, and real estate pricing on the Monterey Peninsula.

If you’re a Realtor or investor exploring a vacation rental in Monterey County, you’ve probably come across glowing articles promising big returns from short-term rentals. But one recent article on Realtor.com (https://www.realtor.com/advice/hyperlocal/renting-second-home-monterey-bay/ paints an overly optimistic—and, frankly, misleading—picture of the Monterey vacation rental investment market. To protect your clients (or your own portfolio), here’s what that article got wrong—and what you really need to know before investing in a vacation rental in Monterey, Carmel, or Pacific Grove.

Casa Simpatico – Pacific Grove

🏠 Vacation Rentals in Monterey Don’t Earn 100% Occupancy

The article estimates income by multiplying the average nightly rate by 98 nights in summer—assuming 100% occupancy. That’s simply not how vacation rentals perform in the real world.  In the Monterey Bay market, even the most successful properties rarely exceed 75% summer occupancy, and average year-round rates often fall between 50% and 65%. When calculating your potential return on investment (ROI), a realistic occupancy estimate is essential.

🚫 Short-Term Rental Laws in Monterey County Are Strict

Here’s the part many out-of-area investors miss: Monterey County has some of the toughest short-term rental laws in California.

  • City of Monterey: Vacation rentals under 30 days are banned.
  • Carmel-by-the-Sea: No short-term rentals allowed.
  • Pacific Grove: STR licenses are capped and non-transferable.
  • Unincorporated Monterey County (including Pebble Beach, Carmel Valley, and Big Sur): A new STR ordinance enforces strict licensing, and zoning restrictions.

If your client wants to do nightly rentals, they may be out of luck—or face a costly legal battle. Always confirm regulations with local planning departments before making recommendations.

💰  Monterey Peninsula Home Prices Are Far Above the County Median

The article estimates mortgage payments based on the median home price for Monterey County—but that includes inland farming areas, not the high-demand coastal towns investors are actually targeting.

A few examples of actual entry prices for vacation rental-suitable homes:

Using county-wide median prices creates a false impression of affordability. If you’re advising clients, make sure they understand the real cost of buying a vacation rental in Monterey County—especially in STR-eligible zones.

🔍  Final Thoughts: Educate Before You Invest

Monterey is a beautiful, high-demand destination, and with the right property in the right location, a vacation rental can be a great long-term investment. But it’s not a passive or guaranteed income stream—especially under today’s legal and market conditions.

✅  Realtors: Guide your clients toward smart, compliant investments.
✅ Buyers: Consult a local property manager or short-term rental compliance expert before closing.

📣 Ready to Invest in Monterey Real Estate?

Our team at Monterey Bay Property Management has helped hundreds of owners successfully navigate the short-term rental market in Monterey County. Contact us for a customized rental income analysis, property review, or compliance consultation.  We will work with you and your Realtor to make sure you have all the information you need to make an informed decision.

 

Managing Broker

MontereyRentals.com

816 Wave Street
Monterey, CA  93940

831-402-1765

The Ultimate Staycation on the Monterey Peninsula

🌊 Escape Without Leaving: The Ultimate Staycation on the Monterey Peninsula

You don’t have to hop on a plane to unwind and recharge. Sometimes, the best getaway is right in your own backyard. Whether you’re a local or live nearby, why not trade airport lines for ocean views and take a staycation right here on the Monterey Peninsula?

Casa Simpatico – Pacific Grove

🌴 Why Choose a Staycation?

  • Staycations are more than just a budget-friendly alternative to travel—they’re a chance to truly slow down and enjoy the beauty of where you live.
  • No long drives.
  • No lost luggage.
  • No stress.
  • Just you, the salty breeze, and a fresh perspective on the Central Coast.

🏖️ The Perfect Place to Stay… Is Right Here

Monterey is a world-class destination for a reason. From the serene coastline and iconic 17-Mile Drive, to the vibrant shops and eateries of Carmel, Pacific Grove, and Cannery Row, there’s no shortage of things to do—or not do, if relaxing is the goal.


💡 Ideas for Your Monterey Staycation:

🏡 Book a Cozy Coastal Rental – Change your scenery with a Cannery Row bungalow, a secluded Carmel cottage, or an oceanfront condo.

🦀 Be a Tourist for a Day – Explore the Monterey Bay Aquarium, take a sunset cruise, or browse boutiques and galleries.

🍷 Indulge in Local Flavor – Sip your way through Carmel Valley wine country, or enjoy an unforgettable meal at one of our award-winning restaurants.

📖 Unplug and Reconnect – Turn off your phone, pick up a book, and let the sound of the waves handle the rest.


✨ Ready to Stay In—and Chill Out?

MontereyRentals.com offers a curated selection of vacation homes perfect for your next staycation. Whether you’re looking for a romantic hideaway, a family-friendly escape, or a solo retreat, we’ve got a place where you can rest, recharge, and fall in love with the Central Coast all over again.


Jan Leasure, Managing Broker
MontereyRentals.com
816 Wave Street
Monterey, CA 93940
📞 831-402-1765

Casa Simpatico – Pacific Grove

🌊 Summer by the Sea: Stay at Casa Simpatico in Pacific Grove

Looking for the perfect place to unwind this summer? Whether you’re working remotely, taking a creative sabbatical, or just ready to trade the city buzz for ocean breezes—Casa Simpatico in Pacific Grove might be exactly what you need.

This charming two-bedroom, one-bath ocean-view cottage is tucked into a peaceful Victorian neighborhood just steps from Lovers Point. It’s cozy, quiet, and full of character—ideal for a 30-night reset or an extended coastal getaway.

Casa Simpatico – Pacific Grove

🏡 What Makes It Special:

  • Ocean views and sea air, visible from your own window

  • Full kitchen, cozy living room with wood-burning fireplace

  • Fast Wi-Fi, cable TV, washer/dryer, and off-street parking

  • A patio for grilling or relaxing with a glass of wine

  • Just a short stroll to the beach, downtown Pacific Grove, and miles of scenic trails

This home is all about easy living and relaxed charm, with warm details like espresso furnishings, butter-yellow walls, and a sunny breakfast nook perfect for slow mornings or journaling by the light.

📅 Available June 10 – July 13

You’ll have the place to yourself for a full 30-night stay, and here’s the best part:
💵 All-inclusive rate: Just under $5,000

That covers everything—no extra fees, no surprises. Just you, the ocean, and the quiet charm of Pacific Grove.

🔗 Book Your Stay

View photos and reserve here:
👉 Casa Simpatico – MontereyRentals.com


Whether you’re seeking inspiration, relaxation, or just a change of scenery, Casa Simpatico offers something rare: a sense of place, of peace, and of possibility.

#VacationRental #PacificGrove #OceanViewCottage

California’s New Law (AB 2747)

What Landlords Need to Know About Offering Credit-Building to Tenants

Starting April 1, 2025, California landlords will be required to offer tenants the opportunity to report their rent payments to a credit bureau, thanks to the passing of Assembly Bill 2747.

This new legislation is part of a broader statewide push to promote financial inclusion and credit access, especially for renters who have historically had few opportunities to build credit through their largest recurring expense — rent.

America’s Rental Housing Crisis: Insights from the Joint Center for Housing Studies of Harvard University
What Is AB 2747?

AB 2747 is a law that requires most landlords to give tenants the option to have their monthly rent payments reported to a major credit bureau (such as Equifax, Experian, or TransUnion).

The goal? Help renters build credit histories and improve credit scores by demonstrating a consistent rent payment record.

Who Does This Apply To?

This law applies to landlords and property management companies who manage five or more residential units in California.

There are a few exceptions (like certain affordable housing providers already reporting rent or using specific public funding), but for most rental housing providers, this will be a new standard practice.
Most property management companies and landlords are opting to extend the benefit to a broader group of tenants to support financial wellness and improve tenant satisfaction.

What Are Landlords Required to Do?

Under AB 2747, landlords must:

  • Notify tenants in writing (in the lease or separately) that they have the option to enroll in a rent reporting service.
  • Provide a rent reporting service or refer tenants to one.
  • Ensure tenants are informed whether there is a fee for the service, and if so, how much.
  • Allow tenants to opt in or out of the reporting service at any time.

Why This Matters for Tenants

For renters who pay on time, rent reporting can:

  • Help boost credit scores
  • Open up access to better loan rates, rental housing, and job opportunities
  • Provide a transparent payment history to share with future landlords

What This Means for Our Clients and Residents

At Monterey Bay Property Management, we’re prepared to comply with AB 2747 well ahead of the July 1, 2025 deadline. We’re evaluating reliable rent reporting platforms and will be rolling out communication to residents in the coming months.

As always, we are committed to:

  • Keeping our property owners informed and compliant with California rental laws
  • Supporting our residents with tools that promote financial well-being
  • Making this transition seamless and stress-free

Have questions about how AB 2747 affects your property or tenants? Reach out to Jan Leasure and the MBPM team at Jan@MontereyRentals.com — we’re here to help you stay ahead of the curve.

America’s Rental Housing Crisis

America’s Rental Housing Crisis: Insights from the Joint Center for Housing Studies of Harvard University

Today, I had the opportunity to participate in a Zoom presentation led by the Joint Center for Housing Studies of Harvard University, titled “Deteriorating Affordability: An Update on America’s Rental Housing 2024.” The discussion highlighted the growing challenges in rental affordability across the nation—an issue that is no longer confined to high-cost states like California but has now become a nationwide crisis.

America’s Rental Housing Crisis: Insights from the Joint Center for Housing Studies of Harvard University

Key Takeaways from the Presentation

🔹 Rental Affordability at an All-Time Low

The United States has reached a new peak in rent unaffordability. While California renters and landlords have long faced some of the highest housing costs in the nation, the affordability crisis has now spread across all 50 states. Today, nearly 22 million households—approximately half of all renters—are cost-burdened, meaning they spend 30% to 50% of their income on rent.

🔹 Who is Most Affected?

The youngest renters (under 25) and the oldest renters (over 65) experience the highest cost burdens. More than half of Black and Hispanic renters are rent-burdened. Even among fully employed households, rental costs continue to outpace earnings

🔹 A Nationwide Struggle—From Urban Centers to Rural Communities

Rent affordability is no longer just a challenge in major metropolitan areas. Over one-third of renters in every state are now cost-burdened, with particularly severe impacts in:

  • The West, where high housing costs persist.
  • The South, where lower housing costs are offset by equally low wages.
  • Rural areas, where 40% of renters are now struggling to afford rent.

🔹 Rising Costs and Declining Availability

The increasing cost of rent is not just a result of inflation but also of declining rental stock. Several factors have contributed to this trend:

  • The demolition of older, more affordable units to make way for new developments.
  • Landlords exiting the market due to heightened regulatory pressures.
  • Rising construction costs, including both labor and materials, leading developers to prioritize luxury housing with higher profit margins over affordable units.

The median percentage of income spent on rent has now reached 31%, and alongside rising costs for food, energy, and healthcare, many renters are struggling to cover essential living expenses. A staggering 17% of renters reported falling behind on rent at some point in 2024, highlighting the precarious financial situation many households face.

Where is the Rental Market Headed?

📉 Rents Are Stabilizing—But Demand Still Outpaces Supply
After the sharp increases following the pandemic, asking rents have plateaued in many areas. However, demand for rental housing continues to exceed supply. Despite over 600,000 multifamily units being constructed last year, the need for housing remains critical—partially fueled by the increasing difficulty of purchasing a home in today’s market.

⚖️ Legislative and Policy Efforts Are Increasing
State and local governments are stepping up efforts to address the crisis, recognizing that rental affordability is no longer just a market trend but a policy imperative. However, economic uncertainty looms large, with experts hesitant to make definitive predictions about the future of the housing market.

A Call to Action: The Need for Smart Solutions

In 2024, California legislators declared housing a human right—a powerful statement, but one that lacked concrete plans for how to ensure access to affordable housing for all. To truly address this crisis, policymakers must prioritize increasing housing supply rather than relying on restrictive measures such as rent control, which often exacerbates shortages.

The path forward requires streamlining development processes, reducing regulatory barriers, and investing in sustainable, affordable housing solutions. Instead of discouraging new construction, we must create policies that incentivize environmentally responsible development while expanding rental options for all income levels.

The affordability crisis is a challenge we cannot afford to ignore. It’s time for bold action to ensure that safe, stable housing remains within reach for all Americans.

Jan Leasure, Managing Broker
www.MontereyRentals.com 
831-402-1765

Vacation Rental Trends

Beachouse

One of the key vacation rental trends that vacation rental owners should be aware of in 2025 is the increased demand for unique stays. Unique stays often command higher nightly rates and attract more bookings.

Travelers are seeking one-of-a-kind experiences, such as remote cabins, tiny homes, treehouses, and luxury glamping.  These types of homes are unique just by their very nature.  But what if you have a vacation rental home that can best be described as “average?”  There are things you can do to turn an average house into a unique vacation rental. This can significantly increase bookings and nightly rates.

Here are some ways to make a property stand out:

  • Give your rental a distinct personality by creating a theme or concept
  • Coastal Retreat (nautical decor, surfboards, beach gear)
  • Mid-Century Modern (vintage furniture, retro appliances)
  • Boho Escape (earthy tones, hanging plants, rattan furniture)
  • Hollywood Glam (bold colors, velvet furniture, gold accents)
  • Name the property accordingly (e.g., “The Boho Hideaway”“The Seaside Retreat”) for branding.
  • Have a custom logo or signage (e.g., a wooden entrance sign)

For lots more revenue-generating ideas, reach out to Jan@MontereyRentals.com!

 

Jan Leasure, Managing Broker
www.MontereyRentals.com 
816 Wave Street
Monterey, CA 93940
831-402-1765