(831) 655-7840 info@MontereyRentals.com

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

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

Top 5 Things to Know About Renting Property on the Monterey Peninsula

Renting property on the beautiful Monterey Peninsula is an exciting opportunity for both tenants and property owners. With its breathtaking coastline, charming communities, and strong rental demand, the region offers plenty of benefits.

Renting property on the beautiful Monterey Peninsula is an exciting opportunity for both tenants and property owners. With its breathtaking coastline, charming communities, and strong rental demand, the region offers plenty of benefits. However, navigating the rental market here requires an understanding of local trends, regulations, and best practices. Whether you’re a homeowner looking to rent out your property or a tenant searching for the perfect place to call home, here are the top five things you should know:

1. Demand Is High, but So Is Competition

The Monterey Peninsula is a highly desirable place to live, thanks to its stunning scenery, temperate climate, and proximity to world-class attractions. As a result, demand for rentals remains strong year-round. However, competition can be intense, especially for well-maintained properties in prime locations like Pacific Grove, Carmel, and Pebble Beach. Renters should be prepared to act quickly when they find a suitable home, while landlords should focus on presenting their properties in the best possible condition to attract quality tenants.

2. Local Rental Regulations Vary by City

Each city within the Monterey Peninsula—Monterey, Pacific Grove, Carmel-by-the-Sea, and others—has its own set of rental laws and regulations. Some areas have strict short-term rental restrictions, while others require permits or specific lease terms. For example, Pacific Grove has a limited number of short-term rental licenses, and Carmel-by-the-Sea prohibits most short-term vacation rentals altogether. If you’re a property owner, understanding these local laws is crucial to avoiding fines and ensuring compliance.

3. Seasonal Rental Trends Impact Pricing and Availability

The rental market on the Monterey Peninsula experiences seasonal fluctuations, particularly in coastal areas where tourism is a major factor. During peak travel months (spring and summer), short-term rental rates can be higher, while long-term leases tend to be more stable year-round. Homeowners looking to maximize rental income should consider these trends when deciding whether to offer short-term or long-term leases. Tenants, on the other hand, may find better deals in the off-season when demand is lower.

4. Property Maintenance and Amenities Matter

Due to the coastal climate, rental properties in the Monterey Peninsula require regular maintenance. Salt air, moisture, and seasonal weather changes can contribute to wear and tear, making upkeep essential for landlords. Properties with modern upgrades, energy-efficient features, and well-maintained outdoor spaces tend to attract higher-quality tenants. Renters often prioritize amenities such as in-unit laundry, updated appliances, and private outdoor areas—features that can set a rental apart from the competition.

5. A Property Management Team Can Make a Big Difference

Whether you’re a homeowner renting out your property or a tenant looking for a reliable landlord, working with a professional property management company can simplify the process. A knowledgeable management team handles everything from tenant screening and lease agreements to maintenance and compliance with local laws. At Monterey Bay Property Management, we specialize in helping property owners maximize their rental investment while ensuring tenants have a seamless rental experience.

Final Thoughts

The Monterey Peninsula offers a unique and dynamic rental market, full of opportunities for both landlords and tenants. By understanding local regulations, market trends, and best practices for property maintenance, you can make informed decisions that benefit your rental experience. If you’re looking to rent out your property or find a rental home in the area, Monterey Bay Property Management is here to help.

Need expert advice on renting in Monterey? Contact us today at www.MontereyRentals.com to learn more!

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

VACATION RENTAL ⭐ SEA BLINK CARMEL

SeaBlink Carmel

 ⭐ Introducing ⭐
SEA BLINK 

Just a “blink” away from the beach, this executive 3,200 sf. home is located in Carmel’s coveted Golden Rectangle. The tri-level design sleeps 8 has four bedrooms, 3.5 baths, three workspaces, multiple outdoor patios, glorious gardens and an evergreen lawn.

Monterey Bay Property Management
DRE #01263576 #01936813

BOOK TODAY!

Beside the Point – Vacation Rental

Simple Pleasures - Pacific Grove

 ⭐ Introducing ⭐
Beside the Point

Oceanfront 4 bedroom 2 bath – 3700 sf. Pacific Grove beach house – sleeps 9. The “front yard” of this iconic beach house is the Pacific Ocean. Otters frolic in the kelp, whales spout offshore, and harbor seals nap in the cove across the street, providing hours of entertainment.

Lover’s Point is a ten-minute walk, the Monterey Aquarium and Cannery Row are just a splash away… and wait till you see the moonlight over Monterey Bay

#propertymanagement #monterey #montereybay #pacificgrove #vacationrental

BOOK TODAY!

Simple Pleasures – Pacific Grove Vacation Rental

Simple Pleasures - Pacific Grove

 ⭐ Introducing ⭐
Simple Pleasures

Relax on the patio and listen to the waves hit the shore, less than a mile away.

Located on a large corner lot in Pacific Grove,
3 bed 2 bath – 1450 sf. neighborhood home sleeps 6.

BOOK TODAY!

VACATION RENTAL 🌞 HOME SWEET HOME

www.MontereyRentals.com/pacific-grove/asilomar/license-to-chill

 VACATION RENTAL 
HOME SWEET HOME

INTRODUCING – A Garden view 3 bedroom 1.5 baths – 1,359 sf home that sleeps 6.

Freshly updated, this well-loved home is convenient to all the amenities of Pacific Grove (shops, groceries, restaurants, cafes, fitness centers) and only few minutes to Asilomar Beach, Lover’s Point, Monterey, Pebble Beach, and #Carmel.

 

BOOK TODAY!

LAST MINUTE CONCOURS ⭐ VACATION RENTALS AVAILABLE

Pacific Perch – #Carmel
Open Aug. 14 – 31 with a 6 night min
$399/night – 6 nights is $3150

BOOK – Pacific Perch
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Victorian Dollhouse – Pacific Grove
Open Concours weekend – through September
Monthly only 8/18 – 9/17 is $6950.

BOOK – Victorian-Dollhouse

#monterey #montereybay #pacificgrove
#pebblebeach #vacationrental

Do you need property management in Monterey County?

Contact Managing Broker:
Jan@MontereyRentals.com – (831) 402-1765

Monterey Bay Property Management was established in 1986 and is the “go-to” company for premier property management services.

A large percentage of our current customers have come through the referrals of previous and current satisfied clients.

Monterey Bay Property Management specializes in the property management of single-family homes, condos, and apartment buildings in Monterey County.

#Monterey #MontereyBay #propertymanagement

Gratitude Inn ⭐ Vacation Rental of the Week!

Boathouse - Vacation Rental of the Week!

Gratitude Inn ⭐ Vacation Rental of the Week!

DISCOUNTED RATES DUE TO CONSTRUCTION.

3 Bedroom | 1 Full, 2 Half Baths – 2,105 sf | Sleeps 6

You’ll be grateful for all the space in this historic home in downtown #PacificGrove.

A former event venue, it has multiple living areas on the first floor, including a den with books and games; a large dining room; a commercial kitchen; two side-by-side powder rooms; and a spacious patio with an outdoor fireplace.

Close to cafes, restaurants, and shops. Blocks to the ocean and Lover’s Point.

BOOK TODAY!