SHORT-TERM RENTAL INFORMATION
Short-term rental potential
The investment case for The Villas @ South Shore
South Lake Tahoe is one of the few California mountain markets with genuine year-round demand — ski season, summer lake season, and a shoulder season driven by events and festivals. The Villas are located in the Tourist Core, the city's designated STR zone.
The Summit — 3 bedroom
3 BD / 3.5 BA · 1,782 sq ft
Projected gross revenue
$85K – $105K
Est. occupancy
48%
2026/2027 projection. Net of TOT taxes, booking platform fees & cleaning fees. Source: RNR Vacation Rentals pro forma, Oct 2026.
The Shore — 4 bedroom
4 BD / 3.5 BA · 2,019 sq ft
Projected gross revenue
$95K – $115K
Est. occupancy
45%
2026/2027 projection. Net of TOT taxes, booking platform fees & cleaning fees. Source: RNR Vacation Rentals pro forma, Oct 2026.
Cash flow estimator
Adjust the assumptions below to model your scenario. This tool does not predict your results — it illustrates how different variables affect estimated net cash flow. Revenue ranges are drawn from the RNR pro forma; all other inputs are yours to set.
Sales price this plan is based on:
$
Edit to recalculate property tax
Annual operating costs
HOA dues
$720/month — set by HOA
Property taxes
1.095% of sales price
Insurance (walls-in policy)
Enter your quote — estimate pending
Mortgage (P&I)
Auto-calculated from your financing inputs
🏦 Mortgage calculator — adjust to match your financing
Loan amount
$1,160,000
Monthly P&I
$7,718
Annual P&I
$92,616
30-yr fixed · principal & interest only
Gross revenue
$95,000
After mgmt fee
$71,250
Total operating costs
$96,518
Est. net cash flow
–$25,268
Net cash flow = gross revenue (scaled to occupancy) minus management fee, HOA dues, property taxes, insurance, and mortgage P&I. Mortgage calculated as 30-year fixed, principal & interest only — excludes taxes and insurance escrow. Changing occupancy scales gross revenue proportionally from the RNR base estimate. Excludes maintenance, furnishings, capital reserves, income taxes, and depreciation benefit. Not financial advice — consult a qualified CPA.
Tax advantages
STR ownership & the tax code
Short-term rentals in the Tourist Core carry significant tax advantages that most buyers overlook. Under current federal law, STR investors can use paper losses to offset active W-2 income — a benefit generally unavailable to long-term rental owners. The 2025 tax legislation made several of these provisions permanent.
100% bonus depreciation — now permanent
The One Big Beautiful Bill Act (2025) permanently restored 100% bonus depreciation for qualifying property acquired after January 19, 2025. A cost segregation study can reclassify 25–40% of a property's purchase price into shorter-lived assets (5, 7, or 15-year schedules), which can then be fully deducted in year one rather than spread over 27.5 years.
Immediate deduction available
The 7-day rule & the STR loophole
When average guest stays are 7 days or fewer, the IRS does not classify the activity as a "rental" under passive activity rules. If the owner also materially participates (500+ hours/year, or meeting other IRS tests), depreciation losses can offset active ordinary income — including W-2 wages — rather than being suspended until sale.
Income offset potential
Schedule E deductions
STR owners typically report on Schedule E (not Schedule C), avoiding the 15.3% self-employment tax on rental income. Deductible expenses include mortgage interest, property taxes, insurance, management fees, repairs, utilities, furnishings, professional fees, and depreciation — all reducing taxable rental income.
No self-employment tax
QBI deduction — made permanent
The Qualified Business Income (QBI) deduction (IRC §199A) was also made permanent under the 2025 tax law. Qualifying STR owners may deduct up to 20% of net rental income from taxable income. Eligibility depends on income levels, active participation, and how the activity is classified — consult a CPA to confirm qualification.
Up to 20% income deduction
Tax disclaimer. The information above summarizes general federal tax provisions that may apply to short-term rental owners. Tax treatment depends on individual circumstances including income level, filing status, level of participation, holding period, and how the activity is classified by the IRS. These provisions are subject to change. The developer, NEXT Crafted Inc., and NEXT New Homes Group make no representations regarding the tax benefits available to any specific buyer. This is not tax advice. Engage a licensed CPA with short-term rental experience before making any investment decision based on projected tax savings.
Permits & eligibility
Are short-term rentals actually permitted here?
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The Villas @ South Shore are located in South Lake Tahoe's Tourist Core zoning district, one of the city's designated areas where short-term rentals are permitted under local ordinance. This is a significant advantage over most of the surrounding residential market, where STR permits are heavily restricted or unavailable. That said, Tourist Core zoning makes each villa eligible to apply for a permit — it does not guarantee automatic issuance. Owners will need to submit a permit application to the City of South Lake Tahoe, pay applicable fees, and comply with all operating requirements at the time of application.
What is the STR permit process in South Lake Tahoe?
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STR permits in South Lake Tahoe are issued by the city and are subject to change. Applicants generally need to complete an application, pass a property inspection, obtain a business license, and collect and remit Transient Occupancy Tax (TOT) on rental income. Permit requirements, fees, and caps on permit numbers can be updated by the city at any time. We strongly recommend consulting directly with the City of South Lake Tahoe's planning department and reviewing current ordinance before closing to ensure you understand the requirements that apply at the time of your purchase.
Does the HOA restrict short-term rentals?
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The community CC&Rs are designed to be STR-friendly — there are no HOA-level restrictions on rental frequency. Owners are responsible for ensuring their guests comply with community rules (noise, parking, hot tub access, etc.) and all applicable city operating requirements. Review the final CC&Rs with your legal counsel prior to purchase as governing documents are subject to change.
Revenue & projections
Where do the revenue projections come from?
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The projections shown on this page come from a pro forma prepared by RNR Vacation Rentals (Oct. 2026), a South Lake Tahoe STR management company. Their analysis is based on gross rental revenue from comparable 3- and 4-bedroom properties in the Tourist Core. Important: RNR has a potential business interest in managing properties at The Villas. The projections reflect conservative ramp-year estimates accounting for the fact that new listings typically build their booking history over 12–18 months. All figures are net of TOT taxes, booking platform fees, and cleaning fees.
What does "gross revenue" mean here — is this what I keep?
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No. The gross revenue figures have already had TOT taxes, booking fees, and cleaning fees deducted — but they are still before your operating costs. You will also need to account for property management fees (typically 20–30%), property taxes, HOA assessments, insurance, maintenance, furnishings, and mortgage costs. Use the cash flow estimator above to model different scenarios.
Is South Lake Tahoe a year-round STR market?
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Yes — South Lake Tahoe has two primary demand seasons (ski/winter and lake/summer) and a meaningful shoulder season driven by events, festivals, and fall color tourism. The 48% and 45% occupancy projections reflect this year-round demand pattern. Markets with only one peak season often struggle to exceed 35% annual occupancy. The diversified demand calendar is one of the core reasons South Lake Tahoe remains a sought-after STR market.
The property as an STR investment
What makes new construction better for STR than a resale property?
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Three things: no deferred maintenance, no cap-ex surprises, and a premium listing position. On Airbnb and VRBO, new construction photos convert at a higher rate and command premium nightly rates. You're not inheriting someone else's renovation backlog — every system in the property is brand new at closing. For STR math to work, your first 2–3 years need to be lean on unexpected expenses. New construction provides that buffer.
What features of the villas are specifically designed with STR guests in mind?
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Several. The ground-floor bedroom suite in every plan expands your addressable guest pool. Professionally engineered soundproofing between units is critical for multi-unit STR properties — noise complaints are among the most common causes of negative reviews. The private garage with gear staging appeals to ski and outdoor recreation guests who are typically higher spend. And the community hot tub is a searchable amenity filter on both Airbnb and VRBO — it expands your impressions in search results.
Can I use the property myself and still rent it out?
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Yes. There are no HOA restrictions on personal use. Many owners structure their personal use around off-peak periods, keeping the highest-rate booking windows available. Note: if you use the property personally for more than 14 days per year (or 10% of rental days, whichever is greater), it may affect how the IRS classifies the property for deduction purposes — this can reduce or eliminate the STR tax advantages described above. Consult a CPA.
Do I have to use a specific property management company?
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No. Owners are free to self-manage or choose their own STR management company. RNR Vacation Rentals prepared the projections referenced on this page and is available as a management option — but there is no requirement to use them. We recommend interviewing multiple management companies, comparing fee structures, and reviewing their South Lake Tahoe portfolio before committing.
