Airbnb vs. Long-Term Rental in Los Angeles: Which is More Profitable?

In 2025, Los Angeles homeowners can earn more from Airbnb than long-term rentals—sometimes up to three times as much—but strict 120-day caps on short-term rentals mean that steady monthly income from long-term leases may still win out for some. The best choice depends on your location, property type, and financial goals.

If you’re a homeowner in Los Angeles—whether in Hollywood, Pasadena, or Venice—you’ve probably wondered whether renting your property on Airbnb would bring in more cash than locking in a long-term tenant. On paper, Airbnb looks enticing, especially with LA’s vibrant tourism scene, but there are important legal limits, tax implications, and market fluctuations to weigh before you commit. Let’s break it down so you can make the smartest call for your property.

1. Revenue Potential in 2025

In Los Angeles, the average Airbnb host earns $30,714 annually with a 46% occupancy rate and an average daily rate (ADR) of $276. In high-demand neighborhoods like Hollywood or Venice Beach, a well-managed listing during peak seasons can pull in 3x what a traditional 1-bedroom long-term rental generates.

By comparison, long-term rentals average $2,500–$4,000 per month ($30,000–$48,000 annually), depending on location and amenities. While the annual totals can be close, Airbnb’s earning potential is capped by LA’s 120-day-per-year limit for primary residences, which can sharply reduce income if you can’t command top rates during those days.

2. Seasonal Demand Trends

Airbnb demand in LA follows the city’s tourism calendar:

High season: June–August (music festivals, summer tourism)

Special spikes: Rose Parade (January), Oscars (March), LA Times Festival of Books (April)

Low season: November–February (excluding major events)

During peak months, occupancy can climb to 76%, compared to the city’s average of 45.6%. Long-term rentals avoid these seasonal swings entirely, offering steady income year-round, which can be crucial if you rely on rental income for your mortgage or living expenses.

3. Tax Implications and Legal Rules

Airbnb / Short-Term Rentals:

Taxed as active business income (up to 37% federal) plus self-employment tax.

Eligible for expense deductions (cleaning, supplies, utilities).

Subject to 15% state rental tax and local Transient Occupancy Tax (TOT).

Can sometimes offset W-2 income if the average stay is under 7 days.

Long-Term Rentals:

Taxed as passive income (qualifies for the 20% Qualified Business Income deduction).

Eligible for depreciation and expense deductions.

Avoids self-employment tax.

4. Which is Better for You?

Choose Airbnb if: You live in a tourist-friendly neighborhood, can maximize the 120 days, and don’t mind hands-on hosting or hiring a property manager.

Choose Long-Term if: You value stability, have a property in a non-tourist area, or prefer less turnover and management hassle.

Pro Tip: In 2025, some LA homeowners are blending strategies—maxing out Airbnb’s 120 days during peak events and then securing a short-term corporate tenant for the remainder of the year.

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