Why Invest in South Orange County?
Southern Orange County is one of California's strongest real estate markets for both long- term appreciation and cash-flowing short-term rentals (STRs) - if you know where to look.
Top reasons investors choose South OC:
• High tourist demand = strong short-term rental potential
• Low inventory = long-term price appreciation
• Coastal lifestyle and proximity to major airports
• Tight STR supply in many cities boosts exclusivity and ROI.
South OC Short-Term Rental Rules by City (2025)
• Cities that permit STRs with regulation: Dana Point, San Clemente, Newport Beach, Huntington Beach, San Juan Capistrano, Mission Viejo, Lake Forest (owner-occupied only)
• Cities that prohibit STRs entirely: Costa Mesa, Tustin, Laguna Niguel, Aliso Viejo, Irvine
Property Tax Projections for Investment Properties
Thanks to Proposition 13, California property taxes are calculated at purchase price, not market value — and may only increase up to 2% per year unless the property is sold or substantially improved.
Purchase Price Estimated Annual Property Tax (11%-125%)
$800,000 -$8,800-$10,000
$1,000,000 -$11,000-$12,500
$1,500.000 -$16,500-$18,750
Additional Costs to Factor In:
• Transient Occupancy Tax (TOT): 8%-15%, varies by city
• STR Permit Fees: Vary by city, $250-$3,000 annually
• Platform Fees: Airbnb/VRBO service charges (~3-15%)
• HOA Restrictions: Some HOAs prohibit or limit STRs, even in legal cities
Example: San Clemente STR ROI Breakdown
Purchase Price: $1,200,000
Startup Costs (permits, furnishing, staging): $25,000
Monthly Revenue (avg): $9,500 Expenses (mortgage, taxes, utilities, mgmt): $6,800
Net Monthly Profit: 52,700
Estimated Annual ROI (pre-tax): -10.8%
Legal Tips for Airbnb Investors
• Confirm zoning before making an offer
• Verify HOA policies (some supersede city law)
• Check TOT registration and enforcement trends
• Use dynamic pricing tools (e.g., AirDNA, PriceLabs)
• Consider forming a California LLC for liability protection and tax efficiency
Top Areas for Legal STR or High-ROI Rentals
• Capistrano Beach (Dana Point) - Coastal zone eligible, high per-night revenue
• Pier Bowl District (San Clemente) - Walkable beach area, STR zones apply
• Balboa Peninsula (Newport Beach) - Iconic tourist destination with permit availability
• Downtown Huntington Beach - Hosted STRs thriving with local surf tourism
How The Steijn Group Helps Investors Succeed
We help investors:
• Identify STR-eligible properties in legal zones
• Calculate cash flow & ROl projections
• Navigate city and county permitting
• Connect with local vendors for cleaning, furnishing, and management
• Gain access to off-market and pre-STR properties
