South Lake Tahoe, CA: Vacation Rental Investment Guide (June 2026)
Big-mountain ski + alpine lake resort. Sierra Nevada on the CA/NV line, ~2h from Sacramento, 3.5h from the Bay Area.
The Numbers
Median Price
$665,000
ADR
$490
avg daily rate
Occupancy
42%
Proj. Gross Revenue
$75,117
per year · 11.3% gross yield
5-Yr Appreciation
+15%
Property Tax
1.10%
effective / yr
The STR Math
The median South Lake Tahoe deal, run through DSCR math
- Purchase price (median)
- $665,000
- Down payment (20%)
- −$133,000
- Loan amount
- $532,000
- P&I @ 7.91% / 30yr
- $3,870/mo
- Property taxes (1.10%/yr)
- $610/mo
- Insurance (~0.9%/yr, elevated for wind/fire/flood)
- $499/mo
- PITIA (full payment)
- $4,979/mo
- Est. STR gross ($490 ADR × 42% occ.)
- $6,260/mo
Illustrative DSCR
1.26
Above the 1.25 threshold most STR lenders want for their best pricing tiers.
Illustrative only, not a quote or pre-qualification. Uses the June 2026 median price and an ADR × occupancy revenue estimate, an indicative STR rate of 7.91% (10-year Treasury + a typical STR spread — see the live data dashboard), the market's effective tax rate, and estimated insurance bumped for this market's wind/fire/flood exposure. Gross revenue is before cleaning, management, utilities, and platform fees — lenders also haircut projected STR income. Actual numbers vary by property and borrower.
Strategy Check
STR vs long-term rental in South Lake Tahoe
Short-term rental
Wins- Gross income
- $6,260/mo
- Est. PITIA @ 7.91%
- $4,979/mo
- Est. DSCR
- 1.26
Long-term rental
- Lease rent
- $2,800/mo
- Est. PITIA @ 7.53%
- $4,839/mo
- Est. DSCR
- 0.58
Short-term wins on gross by about $3,460/month ($6,260 STR gross vs $2,800 lease rent) — that premium is what pays for furnishing, cleaning, and management, with margin left over if you operate well. Note the fallback: at 0.58 estimated LTR DSCR, lease rent alone doesn't carry the median purchase here — this market's debt wants nightly revenue behind it, so the STR permit picture matters doubly.
Regulation Reality
Can you legally run an STR in South Lake Tahoe?
Measure T's residential VHR ban was struck down in court in March 2025; the city's replacement ordinance (effective April 2026) allows VHRs citywide but caps residential-area permits at 900, first-come first-served.
For underwriting, a permit cap changes the order of operations: the permit question comes before the revenue question. Confirm in writing whether the specific address can get (or transfer) a permit before you model a single night of revenue — a property outside the permit pool is a long-term rental wearing a vacation home's price tag. Priced and permitted correctly, the 11.3% gross yield is still on the table.
The Second-Home Angle
Your weekends plus rental income — two ways in
Year-round alpine playground — ski, beach, boat, and casino nightlife on the NV side — within a day-trip radius of Sacramento and the Bay Area.
That dual-use case — your own stays in the weeks you want, rental income the rest of the calendar — is what separates a vacation market from a spreadsheet market, and it opens a second financing door that pure investment properties don't get.
Second-home conventional
As little as 10% down and rates close to a primary residence. The trade: lenders require genuine personal use, qualify you on your own income (W2/DTI), and limit how much of the year the home can be rented out — and some restrict short-term renting entirely. Best when the house is mostly for you and the rental income is offset, not engine.
DSCR investment loan
Typically 20%+ down, priced off the property, and qualified on the property's rental revenue — projected STR income included — rather than your personal income. No personal-use restrictions: rent it 50 weeks, block your own July, run it like the business it is. Best when the income is the point.
Occupancy rules matter: misrepresenting a rental property as a second home is occupancy fraud. If you want unrestricted rental use, the DSCR route exists precisely so you don't have to stretch the truth.
Appreciation & Exit
The hold case in South Lake Tahoe
Five-year appreciation of about 15% is solid, mid-pack performance for a vacation market — enough that the hold builds equity, not so frothy that you're buying someone else's exit.
Exit liquidity in vacation markets is buyer-pool-dependent: you're selling to the next investor or second-home buyer, both of whom shop with the same seasonality and regulation facts you're reading now. A property with a transferable permit, a documented revenue history, and a real off-season strategy sells like an asset; one without them sells like a house.
Verdict — conditional
Worth pursuing — with conditions
- —The permit, not the property, is the deal: Measure T's residential VHR ban was struck down in court in March 2025; the city's replacement ordinance (effective April 2026) allows VHRs citywide but caps residential-area permits at 900, first-come first-served.
- —The math is genuinely good — an estimated 1.26 DSCR and 11.3% gross yield on the median deal — so a confirmed permit converts this from a maybe to a clear yes.
- —Insurance is a first-class underwriting input here: Post-Caldor-Fire wildfire pricing is severe — FAIR Plan placements are common and premiums should be quoted before offer.
Pursue it with: permit eligibility confirmed in writing before you write the offer; an actual insurance quote in the underwriting, not a placeholder. Get those right and this is a buy, not a pass.
Insurance note: Post-Caldor-Fire wildfire pricing is severe — FAIR Plan placements are common and premiums should be quoted before offer.
Seasonality: Strong winter (Heavenly ski) and summer (lake) peaks; October-November and April-May shoulders can drop occupancy sharply.
Data as of June 2026 — refreshed periodically. Town-level estimates for screening, not underwriting; verify comps, permits, and insurance quotes on the specific property.
Next Step
Get a quote from an STR expert who lends in California
Real pricing on your actual deal — second-home and DSCR routes compared side by side, qualified on the property's income, no hard credit pull to see numbers.
South Lake Tahoe vacation rental FAQ
Is South Lake Tahoe a good place to buy a vacation rental?
It's worth pursuing — with conditions. South Lake Tahoe, CA projects roughly $75,117 a year gross (11.3% gross yield, est. 1.26 DSCR on the median deal at 20% down), but STR permits are capped, so confirm permit eligibility for the specific address before you offer. Get that condition right and the market rewards it (June 2026 estimates).
Can I make money on Airbnb in South Lake Tahoe?
The market math says yes: $490 ADR × 365 nights × 42% occupancy ≈ $75,117 a year ($6,260/month) gross before operating costs. Against an estimated $4,979/month PITIA on the median $665,000 purchase, that's roughly a 1.26 DSCR — real margin. Strong winter (Heavenly ski) and summer (lake) peaks; October-November and April-May shoulders can drop occupancy sharply.
Can a South Lake Tahoe property double as a second home?
Yes — and the dual-use case is much of the appeal. Year-round alpine playground — ski, beach, boat, and casino nightlife on the NV side — within a day-trip radius of Sacramento and the Bay Area. Two financing routes: a second-home conventional loan (as little as 10% down with owner-occupied-adjacent rates, but lenders impose personal-use and rental-day limits) or a DSCR investment loan (20%+ down, qualifies on the property's rental income, no personal-use restrictions). Most buyers choosing between them are really choosing between maximum leverage and maximum rental flexibility.
Run the numbers yourself
Calculator
STR calculator — pre-filled for South Lake Tahoe
ADR, occupancy, and median price loaded. Adjust to your deal.
Financing
STR / vacation rental loans, explained
How lenders underwrite projected Airbnb income — and what it costs.
Live Data
Market data dashboard
10Y Treasury, indicative STR rate ranges, and the full leaderboards.
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