What are the Regulations and Restrictions Related to Short-Term Rentals (e.g., Airbnb) in Merced County?

Ashley Stayner • April 25, 2024

Short-term rentals have become an increasingly popular way for people to earn extra cash or offer affordable accommodation to travelers. Many rental property owners have decided to test the waters, even if they’ve traditionally rented out long-term homes to stable tenants with a lease for at least a year.

Merced and the surrounding area is an ideal place for short-term rentals. There are schools and businesses here that attract people for a week or more. When those travelers don’t want to stay in a hotel, a short-term rental or a vacation home is exactly the right fit. It provides privacy and extra space - a home away from home.

The fact that this market is so ideal for short-term travelers only makes the short-term rental opportunity more attractive to owners and investors. Platforms such as Airbnb, Vrbo, and HomeAway make it easy for homeowners to rent out their properties and earn income, even if they’re only renting out a room in their home.

However, there are also local regulations and restrictions that must be considered. If you plan to offer your property as a short-term rental in Merced County, it's important to understand the rules to avoid any legal issues. The County does regulate the way these properties are advertised, rented, and zoned. Owners must follow all habitability standards, tax laws, parking standards, and rules around quiet hours.

At Wisdom Property Management & Realty, we’ve been helping owners with both long-term and short-term investment properties. We can help you avoid legal hiccups and all the risks and liability that come with such an endeavor.

Let’s talk about what you need to know before you dive into short-term rentals.

Understand Merced County Zoning Laws

The Merced County Zoning Code covers short-term rental properties in Title 18, Chapter 18.60.270. Most residential areas in Merced County are zoned for short-term rentals, even including some agricultural areas. Most residential areas are zoned for single-family homes, which means that renting out a room or a guest house on the same property as your home is usually allowed. However, if you own a property in a commercial zone, short-term rentals are often prohibited.

You’ll need to understand the occupancy limits, the time limits, and the long list of requirements that come with a short-term rental. For example, a short-term rental is defined as lodging that’s rented out to a guest for 30 days or less. You’re required to have a local contact person available to respond to problems and emergencies 24 hours a day. No more than five bedrooms can be provided to guests at a time. You’ll have to provide off-street parking and enforce quiet hours from 10PM until 7AM.

Get to know this part of the Zoning Code before you rent out a short-term property.

Apply for a Business License and Permit

Before you start renting out your property on platforms like Airbnb, you'll need to apply for a permit from the Merced County Planning Department. This will essentially provide you with a business license, which you’ll need to be granted within 30 days of renting out a property to short-term guests.

There are fees associated with applying for a permit, and the process can take several weeks.

Understand the Transient Occupancy Tax (TOT)

Collecting taxes is required for short-term rental property owners because you’ll be expected to pay them quarterly.

Short-term rentals in Merced County are subject to Transient Occupancy Tax (TOT), which is a tax on the rental of hotel and motel rooms. As a short-term rental owner, you're responsible for collecting this tax from your guests and remitting it to the county. Failure to do so can result in fines and penalties. The current TOT rate in Merced County is 10%, and it’s due on the last day of the month following the end of a fiscal quarter. If you don’t submit your paperwork and your payment on time, you’ll be served a delinquency notice which will include penalties and interest payments.

Understand Liability Issues

Every investment comes with its own risks, and as a short-term rental owner, you may be looking at some additional liability simply because of the nature of your business. No one wants to think about those worst-case scenarios, but you could be held liable for any injury or damage that occurs on your property.

Think about this when you’re putting protections into place for your investment. It's important to have adequate insurance coverage and to inform your guests of any potential hazards on the property (such as swimming pools or steep staircases). Additionally, you will be subject to noise ordinances, which restrict the amount of noise that can be generated on your property. You’re required to state in your advertisement and your rental agreement that quiet hours are from 10PM until 7AM.

Be a Good Neighbor

Short-term rental properties are a great opportunity for owners who are looking for high nightly rates and the flexibility of not having to give up the usage of your own home for a full year under a long-term lease.

These types of properties are not always welcome in all neighborhoods, however. You may find some pushback from neighbors who don’t appreciate the revolving door of new guests in the area. So, make sure you’re doing everything you can to be a good neighbor when renting out your property. Make sure that your guests are respectful of the neighborhood and that they follow any parking or trash disposal guidelines. If you receive complaints from neighbors about noise or other issues, take them seriously and address the situation promptly.

Renting out your property as a short-term rental can be a great way to earn extra income, but it's important to understand the rules and regulations in Merced County. By following the guidelines outlined above and being a responsible short-term rental owner, you can minimize your risk and ensure a positive experience for yourself, your guests, and your neighbors.

We are here to help you. Contact us at Wisdom Property Management & Realty, Inc. We lease, manage, and maintain investment properties in Merced, Atwater, Livingston, Winton, and Delhi.

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Demographic Shifts in California: Adapting Rental Strategies for Merced

By Ashley Stayner • February 20, 2025

Discover how demographic shifts in Merced are reshaping the rental market. Learn key investment strategies to maximize ROI in this evolving real estate landscape.

Leveraging Social Media to Market Rental Properties in California: Tips for Merced Landlords

By Ashley Stayner • January 16, 2025

It is time to get social, and we’re going to insist you become an influencer even if you don’t naturally gravitate towards the likes of Instagram, Facebook, and other social media platforms. Leveraging social media to market rental properties in Merced and throughout California is essential. You gain a lot more traction on social sites than you do by simply posting a listing on Zillow or HotPads. All of your potential renters are on social media, and you should be there too. Let’s talk about some tips, assuming you’re not already going viral on the ‘gram. Part One: Put Together Your Profile A successful social media strategy starts with a profile that will attract the kind of attention you want. If you’re already a presence on social media, that’s great. If you’re just getting started to better market your rental home , be intentional about how you present yourself. Your audience will likely be potential renters who will view your page and consider the homes you have to offer. If you’re posting homes for rent on your personal social media pages, you can easily include all of the people you already know in your network. However, you also want to make sure your personal page is professional. If you’re prone to angry political posts, you might alienate a lot of potential renters on the other side. Your social media presence, as a landlord, needs to be welcoming to everyone. Generally, we recommend that you establish a separate profile for the work you plan to do sharing your rentals. This will help narrow your social media postings on that particular profile to the rental property you’re marketing or related topics. Visitors won’t get confused, and they won’t have to scroll past photos of your pets and vacations to find the homes you offer for rent. Before you start posting about your available rental properties, you’ll want to make sure you have all of the pertinent information on your profile. There has to be updated contact information, for example. You’ll also want a credible profile photo. Maybe it’s a snapshot of the property you’re trying to rent. It could be a picture of the neighborhood or even a photo of the state or region you’re in. A picture of yourself is also fine, as long as it’s professional. Reaching the Right Social Media Audiences When we’re talking about social media marketing, it’s important to understand that the audience is everything. Social spaces are crowded, and you want to reach the right people. According to the Pew Research Center, more than 72 percent of Americans use social media daily. By using hashtags, joining local or industry-specific groups, and following popular sites and spots throughout Merced, you’ll focus on the people who are looking for a new rental home or on the people who know people who are looking for a new rental home. Create a Social Media-Friendly Listing What will get the most attention on social media sites? Photos and videos. These will be your most important tools when we talk about posting your rental listing on social media sites. This is the type of content that gets attention. It gets likes. It gets shares. It gets comments. All of those things will expand your audience and increase your reach. Although text plays an essential role in social media, and you’ll use it to share details such as: Rental amount Move-in ready dates Rental qualifications Security deposit amounts Images and videos are especially crucial. You’ll want to upload clear and crisp photos so that they render well on mobile devices. You’ll want short, engaging videos that showcase your property and provide people with a glimpse of how things look. If you want to be more impactful with how you market Merced homes for rent on social media, focus on the property’s layout, show real-time room sizes, give viewers a close-up of amenities , and an idea of the property’s location. When you have special features to show off, such as walk-in pantries, garden tubs, smart home technology like video doorbells, and fenced backyards, video is a great way to show those things off while giving viewers an idea of what it’s like to actually be there. Plenty of social media platforms are built for video; you can use Instagram reels, Facebook and Instagram live videos, Snapchat story updates, and of course YouTube. Hashtags are Essential Please tell us you know what a hashtag is. They’re helpful when you’re posting because they get the attention of your target audience. Using hashtags on your posts makes them more accessible because when people search for a particular hashtag, your post will be there, ready for them to view. Use specific hashtags that identify your location, the type of property, or the neighborhood name. Try #Mercedrentals, #Mercedhomeforrent, #Mercedapartment, and similar hashtags to get attention and focus on your desired audience. Promote Your Merced Rental Listing

The California Landlord's Property Management Checklist: Tailored for Merced

By Ashley Stayner • December 19, 2024

Here’s our property management checklist – Merced edition. These are the things to look for as a landlord with local properties who wants to have a pleasant and profitable investment experience.