Projected income for short-term rentals
(STRs) in Palm Springs is highly dependent on the “bedroom and bath count” and “pool” combination, as these are the primary drivers for guest demand.
As of early 2026, the market has stabilized following regulatory changes. For a home with a pool and a 10,000+ sq. ft. lot (a “standard” lot size for MCM homes in the area), the following annual gross revenue estimates apply:
Projected Annual Revenue by Bedroom Count (2026)
| Bedrooms | Avg. Nightly Rate (ADR) | Est. Annual Gross Revenue | Market Tier |
| 2 BR | $250 – $350 | $62,000 – $75,000 | Efficient/Entry |
| 3 BR | $400 – $550 | $95,000 – $115,000 | Most Competitive |
| 4 BR | $600 – $850 | $150,000 – $180,000 | High Performance |
| 5 BR | $900 – $1,200 | $195,000 – $230,000 | Luxury/Event |
| 6 BR | $1,300 – $1,800 | $260,000 – $310,000 | Multi-Family |
| 7 BR+ | $2,000+ | $350,000+ | Estate/Corporate |
Critical Market Factors for 2026
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The 26-Contract Cap: New permits are capped at 26 rental contracts per year. This has shifted the strategy toward longer average stays (e.g., 4–7 nights) rather than high-turnover weekend stays.
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The “30-Day+” Pivot: Due to strict STR density caps (20% per neighborhood), many owners of 5+ bedroom estates are pivoting to 30-day minimum “Mid-Term” rentals to bypass the permit waitlists and the 11.5% Transient Occupancy Tax (TOT).
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Seasonality: Revenue is heavily weighted toward the “High Season” (January–April). March and April (Coachella/Stagecoach months) often account for 25–30% of a property’s total annual income.
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Occupancy Trends: Average market occupancy sits around 38%–45%. Homes with high-end MCM design or unique desert landscaping on those larger 10k+ sq. ft. lots tend to perform in the top 10% of these estimates.
Neighborhood Nuances
While a 10,000 sq. ft. lot is generous, the “wind factor” in North Palm Springs (e.g., Racquet Club/Desert Park Estates) can lead to higher cancellations in the spring, whereas “The Mesa” or “South Palm Springs” (92264) typically commands a 10–15% premium for being more wind-sheltered.