Airbnb Sacramento, California: Market Data, Laws & Investor Guide

Sacramento, California is a prime location for starting an Airbnb business in 2024. As the capital city of California, Sacramento offers a unique blend of history, culture, and outdoor recreation that attracts a diverse range of visitors. With a growing population and a thriving tourism industry, Sacramento presents a lucrative opportunity for short-term rental hosts.

In 2024, Sacramento is poised for significant growth in the short-term rental market. According to Airbnb data, Sacramento has seen a 25% increase in bookings year-over-year, with an average occupancy rate of 72%. This high demand for short-term rentals is driven by Sacramento's vibrant arts and entertainment scene, as well as its proximity to popular destinations like Lake Tahoe and Napa Valley.

Moreover, Sacramento's relatively affordable housing market compared to other major California cities makes it an attractive option for Airbnb hosts. The median home price in Sacramento is $450,000, which is significantly lower than San Francisco's median of $1.3 million. This means that hosts can purchase properties at a lower cost and still generate substantial rental income.

Another factor contributing to Sacramento's appeal for Airbnb hosts is the city's supportive regulatory environment. In 2016, Sacramento implemented a short-term rental ordinance that allows hosts to rent out their primary and secondary residences with a permit. This clear legal framework provides hosts with the confidence to operate their businesses without fear of legal repercussions.

Starting an Airbnb business in Sacramento, California in 2024 offers a unique opportunity to tap into a growing market with high demand and favorable regulations. With its diverse attractions, affordable housing, and supportive regulatory environment, Sacramento is an ideal location for hosts looking to launch a successful short-term rental business.

Sacramento Short-Term Rental Market Analysis

Sacramento's short-term rental market has shown strong performance and growth in recent years. Here's a detailed analysis of the city's Airbnb market:

Occupancy Rate, Nightly Rate, and Seasonality

According to AirDNA data, in 2024 Sacramento short-term rentals on Airbnb and Vrbo average:

• 58% occupancy rate
• $156.70 average daily rate
• $33,200 average annual revenue per listing

The market experiences seasonality, with occupancy and revenue peaking in October:

1. 63% occupancy in October
2. $2,700 potential monthly revenue in October

Market Growth and Tourism Industry

Sacramento's Airbnb market has seen steady growth over the past two years:

1. Active listings increased by 8% year-over-year
2. Tourism spending in Sacramento County grew by 4.5% in 2023 compared to 2022
3. Travel-related jobs in Sacramento County rose by 9.6% since 2022

The city's tourism industry is rebounding well post-pandemic, with Visit California reporting that Sacramento is 95-99% recovered to pre-pandemic levels.

Key Events and Festivals

Sacramento hosts numerous events and festivals throughout the year that boost tourism and short-term rental demand:

1. Aftershock music festival (October)
2. GoldenSky Country Music Festival (October)
3. Holo Holo Music Festival (September)
4. Farm-to-Fork Festival (September)
5. California State Fair (July)
6. Sacramento Pride Parade & Festival (June)
7. Amgen Tour of California (May)
8. Concerts in the Park (May-July)
9. Wide Open Walls mural festival (August)

Booking Durations and Mid-Term Rentals

According to BiggerPockets forums, Sacramento sees demand for mid-term rentals (3-6 months) from business travelers and travel nurses. AirDNA data shows 60.3% of listings have a 30+ day minimum stay, indicating a strong monthly rental market.

In summary, Sacramento's short-term rental market is thriving, with high occupancy rates, competitive nightly rates, and strong demand during peak seasons and events. The city's steady tourism growth and diverse event calendar make it an attractive destination for Airbnb hosts and guests alike.

Best Neighborhoods in Sacramento for an Airbnb Business

When choosing an ideal location to start an Airbnb business in Sacramento, hosts should consider factors such as proximity to popular attractions, up-and-coming areas, and tourist hotspots. Here are the top 5 neighborhoods in Sacramento for starting an Airbnb, based on a combination of data-driven insights and local knowledge:

1. Midtown

Midtown is a vibrant, walkable neighborhood known for its diverse restaurants, bars, and shops. It's close to many of Sacramento's top attractions, making it an ideal location for Airbnb hosts.

1. Average Occupancy Rate: 68%
2. Average Daily Rate: $142
3. Airbnb Seasonality: High demand in summer and fall
4. Estimated Annual Revenue: $35,500

According to Zillow, the median home price in Midtown is $495,000. For the best return on investment, consider investing in a 2-bedroom property, as they tend to have high occupancy rates and competitive nightly rates.

2. Downtown

Downtown Sacramento is the heart of the city, offering easy access to the State Capitol, Golden 1 Center, and numerous museums and theaters. Its central location and abundance of business travelers make it a prime spot for Airbnb rentals.

1. Average Occupancy Rate: 72%
2. Average Daily Rate: $155
3. Airbnb Seasonality: Consistent demand throughout the year
4. Estimated Annual Revenue: $40,800

The median home price in Downtown Sacramento is $399,000, according to Zillow. Studios and 1-bedroom apartments are popular choices for Airbnb hosts in this area, as they cater to solo travelers and business professionals.

3. East Sacramento

East Sacramento is a charming, tree-lined neighborhood known for its historic homes and proximity to popular parks like McKinley Park. Its quiet, residential vibe appeals to families and travelers seeking a more local experience.

1. Average Occupancy Rate: 64%
2. Average Daily Rate: $135
3. Airbnb Seasonality: Peak demand in summer
4. Estimated Annual Revenue: $31,500

The median home price in East Sacramento is $750,000, per Zillow data. Investing in a 3-bedroom home can provide excellent returns, as they are popular among families and groups.

4. Land Park

Land Park is a picturesque neighborhood south of downtown, known for its namesake park, which features a zoo, amusement park, and golf course. Its family-friendly atmosphere and proximity to attractions make it a desirable location for Airbnb rentals.

1. Average Occupancy Rate: 62%
2. Average Daily Rate: $130
3. Airbnb Seasonality: High demand in summer and holiday weekends
4. Estimated Annual Revenue: $29,400

Zillow reports a median home price of $650,000 in Land Park. For optimal returns, consider a 3-bedroom house, which can accommodate families and groups visiting the nearby attractions.

5. Oak Park

Oak Park is an up-and-coming neighborhood just southeast of downtown, known for its thriving arts scene, craft breweries, and farm-to-fork restaurants. Its increasing popularity and affordability make it an attractive option for Airbnb hosts.

1. Average Occupancy Rate: 60%
2. Average Daily Rate: $115
3. Airbnb Seasonality: Growing demand throughout the year
4. Estimated Annual Revenue: $25,200

The median home price in Oak Park is $350,000, according to Zillow. A 2-bedroom house or apartment can provide excellent returns, catering to couples and small groups seeking a trendy, budget-friendly stay.

When selecting a neighborhood for your Airbnb business in Sacramento, consider your target audience, budget, and investment goals. By focusing on areas with strong demand, competitive nightly rates, and the right property type, you can maximize your returns and build a successful Airbnb business in California's capital city.

Maximizing Your Revenue Through In-Demand Amenities and Properties in Sacramento

To maximize your revenue as an Airbnb host in Sacramento, it's essential to set competitive prices and offer in-demand amenities that attract guests. Here's a guide to help you optimize your listing and property for success.

Setting Competitive Prices

When setting your nightly rates, consider the following factors:

• Seasonality: Adjust your prices based on peak and off-peak seasons. Sacramento experiences high demand during summer and fall, especially during festivals and events.
• Occupancy rates: Monitor your occupancy rates and adjust prices accordingly. If your occupancy is low, consider lowering your prices to attract more bookings.
• Competitor pricing: Research similar listings in your area and price competitively to stay attractive to potential guests.
• Dynamic pricing tools: Utilize Airbnb's Smart Pricing feature or third-party dynamic pricing tools to automatically adjust your rates based on market demand.

In-Demand Amenities

Based on an analysis of top-performing Airbnb listings in Sacramento, these amenities are highly sought-after by guests:

• Self check-in: Offer a seamless check-in experience with a lockbox or smart lock, allowing guests to arrive at their convenience.
• Fully-equipped kitchen: Provide a well-stocked kitchen with modern appliances, cookware, and dining essentials for guests who prefer to cook their meals.
• Outdoor space: Sacramento's pleasant weather makes outdoor amenities like a patio, balcony, or backyard highly desirable.
• Air conditioning: With Sacramento's hot summers, air conditioning is a must-have amenity for guest comfort.
• High-speed internet: Fast, reliable Wi-Fi is essential for both leisure and business travelers.
• Washer and dryer: In-unit laundry facilities are a significant plus, especially for longer stays.
• Streaming services: Provide access to popular streaming platforms like Netflix, Hulu, or Disney+ for guest entertainment.
• Unique decor: Incorporate local art, vintage finds, or themed decor to create a memorable and Instagram-worthy space.

Popular Property Types and Revenue Potential

According to AirDNA data, these are the most popular property types in Sacramento and their average revenue potential:

Houses

• 1-bedroom: $1,200/month
• 2-bedroom: $2,100/month
• 3-bedroom: $2,800/month
• 4-bedroom: $3,500/month
• Median home price in Sacramento (Zillow): $450,000

Apartments and Condos

• Studio: $900/month
• 1-bedroom: $1,400/month
• 2-bedroom: $1,900/month
• Median condo price in Sacramento (Zillow): $285,000

Private Rooms

• Private room in a house: $800/month
• Private room in an apartment: $700/month

By offering competitive prices, in-demand amenities, and focusing on popular property types, Airbnb hosts in Sacramento can maximize their revenue potential and attract a steady stream of guests. Keep in mind that these figures are averages, and actual revenue may vary based on factors such as location, property condition, and marketing strategies.

Understanding Sacramento Short-Term Rental Regulations

Sacramento, California has a short-term rental ordinance that allows hosts to offer primary and secondary residential dwelling units for stays of 30 days or less with a Short-Term Rental Permit. The initial application fee is $230, and permits must be renewed annually for $160. Hosts must also pay Sacramento's annual business operations tax of $54 and collect and remit a 12% transient occupancy tax on reservations 30 nights and shorter.

To obtain a permit, hosts must provide a Business Operation Tax Account, proof of liability insurance, and a fire safety plan. They must also adhere to the Rental Housing Program Standards, which include requirements for minimum bedding, heating, ventilation, cleanliness, and safety. The ordinance prohibits renting to more than six guests at a time per parcel and requires hosts to maintain a rental registry for three years.

Sacramento enforces its short-term rental regulations, with hosts facing fines and penalties for non-compliance. Some hosts have reported difficulties obtaining permits due to strict requirements and regulations. However, Sacramento is generally considered Airbnb-friendly, with hosts able to generate significant revenue from their short-term rental properties.

To start a short-term rental business in Sacramento, hosts should review the city's regulations, obtain a Business Operation Tax Account, collect and remit taxes, adhere to the Rental Housing Program Standards, apply for a Short-Term Rental Permit, ensure accessibility and safety compliance, maintain accurate records, and consider obtaining liability insurance.

Read our full STR regulations guide for more detailed information on Sacramento short-term rental regulations, including insights from local hosts and a closer look at other policies.

Keys to Success as a Sacramento Airbnb Host

Becoming a successful Airbnb host in Sacramento requires a combination of strategic planning, effective property management, and a keen understanding of the local market. By focusing on in-demand amenities, attractive design themes, and targeted marketing, hosts can attract a steady stream of guests and maximize their rental income. However, operating an Airbnb in Sacramento also comes with its own set of challenges and risks that hosts must navigate to ensure long-term success.

Popular Amenities and Design Themes in Sacramento

To stand out in Sacramento's competitive Airbnb market, hosts should focus on providing amenities and design elements that appeal to the city's diverse visitor base. Some popular amenities include:

• High-speed Wi-Fi for remote workers and digital nomads
• Air conditioning to combat Sacramento's hot summers
• Outdoor spaces like patios, balconies, or backyards for enjoying the pleasant weather
• Fully-equipped kitchens for guests who prefer to cook their own meals
• Smart home features like keyless entry and voice-controlled devices
• In terms of design themes, Sacramento Airbnb hosts have found success with:
• Mid-century modern decor that pays homage to the city's architectural heritage
• Rustic, farmhouse-inspired interiors that reflect the region's agricultural roots
• Bright, colorful spaces that showcase local art and create an inviting atmosphere

Attracting Sacramento Customers

To attract guests to your Sacramento Airbnb, consider the following strategies:

• Highlight your property's unique features and amenities in your listing description and photos.
• Offer competitive pricing that reflects the value of your property and the local market conditions.
• Provide exceptional customer service by promptly responding to inquiries, offering local recommendations, and ensuring a smooth check-in process.
• Leverage social media and targeted advertising to reach potential guests who are interested in visiting Sacramento.
• Partner with local businesses, such as restaurants or tour operators, to cross-promote your Airbnb and offer exclusive discounts to your guests.

Challenges and Risks of Operating an Airbnb in Sacramento

While Sacramento is generally considered an Airbnb-friendly city, hosts still face several challenges and risks when operating a short-term rental. According to hosts on forums like Reddit and BiggerPockets, some of the most common issues include:

• Navigating the city's short-term rental regulations and obtaining the necessary permits and licenses. As one host on Reddit noted, "The permit process can be time-consuming and confusing, but it's essential to ensure you're operating legally."
• Dealing with noise complaints and disruptive guests, particularly in residential neighborhoods. A host on BiggerPockets advised, "Set clear house rules and communicate expectations to your guests to minimize disturbances."
• Managing the high turnover and cleaning requirements associated with short-term rentals. One Sacramento host on Airbnb's community forum recommended, "Hire a reliable cleaning service and develop a thorough checklist to ensure your property is always guest-ready."
• Protecting your property from damage and liability issues. A host on Facebook suggested, "Invest in a comprehensive short-term rental insurance policy and require a security deposit from guests."

To mitigate these risks and run a successful Airbnb in Sacramento, hosts should:

• Stay informed about local regulations and comply with all permit and licensing requirements.
• Develop a detailed rental agreement that outlines house rules, guest expectations, and liability policies.
• Implement a thorough screening process for potential guests to minimize the risk of disruptive behavior.
• Establish a network of reliable service providers, including cleaners, maintenance professionals, and property managers, to ensure your rental is well-maintained and guest-ready.
• Regularly communicate with your guests and promptly address any concerns or issues that arise during their stay.

By following these guidelines and adapting to the unique challenges of the Sacramento market, Airbnb hosts can create a profitable and sustainable short-term rental business in California's capital city.

Using BNBCalc to Find Profitable Properties in Sacramento, California

Investing in a short-term rental property in Sacramento can be a lucrative venture, but it's essential to conduct thorough research and analysis to ensure profitability. BNBCalc is a powerful tool that can help aspiring Airbnb business owners identify profitable properties, benchmark comparable rentals, and determine the optimal price and property size. By leveraging BNBCalc's features and partnering with experienced professionals, investors can make informed decisions and maximize their returns in the Sacramento market.

Analyze Properties Using BNBCalc

To begin your search for a profitable Airbnb property in Sacramento, use BNBCalc's property analysis tool. Simply enter the address of a potential property, and BNBCalc will provide detailed insights into its estimated revenue, occupancy rates, and expenses. The tool takes into account factors like seasonality, local market trends, and comparable rentals to generate accurate projections.

Benchmark Comparable Rentals

BNBCalc allows you to compare your potential property to other nearby rentals in the Sacramento area. By analyzing the performance of similar listings, you can gain valuable insights into pricing strategies, amenity offerings, and guest preferences. Use this information to optimize your own listing and ensure that you're fetching top dollar for your short-term rental.

Determine the Right Price and Property Size

With BNBCalc's help, you can determine the ideal number of bedrooms, bathrooms, and purchase price to maximize your revenue potential. The tool's advanced algorithms take into account various factors, such as local market demand, property features, and operating expenses, to provide personalized recommendations. By following these insights, you can make data-driven decisions that align with your investment goals.

Make an Offer

Once you've identified a promising property and determined its potential returns using BNBCalc, it's time to make an offer. To streamline the financing process, consider working with BNBCalc's partnered STR lender, such as Brian Bockholdt at Alliant Credit Union, who can provide competitive rates and pre-qualification services. By securing financing early in the process, you'll be better positioned to act quickly when the right property becomes available.

Use Our Tax Calculator

In addition to its property analysis features, BNBCalc also offers a tax calculator that can help you determine potential tax deductions from bonus depreciation. By inputting your property's details and operating expenses, you can estimate your tax savings and optimize your investment strategy. Be sure to consult with a qualified tax professional to ensure compliance with all applicable laws and regulations.

Come Up With a Buy Box

To streamline your property search and ensure a worthwhile investment, develop a "buy box" that outlines your specific criteria for an ideal Airbnb property in Sacramento. Some key factors to consider include:

• Location: Focus on neighborhoods with strong demand, such as Midtown, Downtown, or East Sacramento.
• Property type: Identify the most popular and profitable property types in the area, such as single-family homes, apartments, or condos.
• Amenities: Prioritize properties with in-demand amenities, like outdoor spaces, high-speed Wi-Fi, and air conditioning.
• Price range: Set a budget based on your investment goals and the potential returns identified by BNBCalc.
• Occupancy rates: Look for properties with a history of high occupancy rates or the potential to achieve them through strategic improvements and marketing.

By using BNBCalc's powerful tools and partnering with experienced professionals, aspiring Airbnb business owners can navigate the Sacramento market with confidence and find profitable properties that meet their investment criteria. With a data-driven approach and a clear buy box, investors can maximize their returns and build a successful short-term rental business in California's capital city.

Ready to start your Airbnb journey in Sacramento? Use BNBCalc to analyze potential properties and make informed investment decisions. Our powerful tool provides comprehensive data to help you maximize your profits. Check out this pre-analyzed Sacramento Airbnb opportunity and see how BNBCalc can help you succeed in the short-term rental market. Visit BNBCalc.com today and take the first step towards building your Airbnb business.