Investing With STRs in San Mateo? Read This First

Thinking about buying in San Mateo to run a short-term rental? Great idea, but the rules and costs here can make or break your returns. The city allows STRs with conditions, and small details like occupancy limits or HOA rules often surprise new investors. In a few minutes, you’ll learn the key regulations, taxes, insurance needs, budgeting tips, and steps to take before you buy. Let’s dive in.

Quick essentials for San Mateo STRs

• You must register your STR and get a business tax certificate. The City administers the program with HdL and outlines operating rules on its Short-Term Rental page.
• The Transient Occupancy Tax is 14 percent of rent charged, and hosts remit it monthly. See the City’s TOT program.
• Key operating limits: unhosted stays are capped at 120 days per year, ADUs are not allowed as STRs, occupancy is two people per bedroom or 10 total (whichever is less), and parties are prohibited.
• If the property is in unincorporated San Mateo County’s coastal zone, different rules apply, including a permit and a typical 180-night cap for unhosted stays. Review the County’s STR permit page.
• HOAs can restrict or prohibit stays of 30 days or less if their governing documents say so. California’s AB 3182 confirms that authority. Read the bill text on AB 3182.

How San Mateo regulation works

Registration and business certificate

San Mateo requires STR operators to register and maintain a business tax certificate. The City uses HdL to manage the program, and you must keep your records current. Review forms, fees, and contacts on the City STR page.

Operating rules you must follow

Plan for a local contact who can respond quickly to issues, follow posted parking minimums, and comply with occupancy limits of two guests per bedroom or 10 total. Parties and events are not allowed. ADUs are excluded from STR use, and unhosted rentals are limited to 120 days per year. Noncompliance can lead to citations or registration revocation.

Transient Occupancy Tax at 14 percent

The City’s TOT rate is 14 percent of the rent charged to guests. You collect the tax and remit it monthly, typically through HdL. Whether a platform collects on your behalf can vary, so verify arrangements and maintain clear records. See the City’s TOT guidance.

County coastal zone rules

If the property is in unincorporated San Mateo County’s coastal zone, you need a County STR permit and must follow County-specific limits. Common rules include a 180-night unhosted cap, a local contact within 20 miles, occupancy limits, parking standards, and TOT remittance to the County. Check zoning before you apply on the County’s STR permit page.

HOA and CC&R realities

City approval does not override your HOA. Under AB 3182, associations may prohibit rentals of 30 days or less if their governing documents say so. Before you rely on STR income, read the CC&Rs, any amendments, and confirm with the HOA. Review statutory context in AB 3182.

Money matters and insurance

Estimate revenue with real data

Public, free STR performance data is limited at the city level. Many investors use paid tools or local manager comps to set ADR and occupancy assumptions. For a framework on evaluating occupancy trends and performance, see this industry overview on analyzing Airbnb occupancy.

Budget the full cost of ownership

Your pro forma should include management fees, cleanings and linens, utilities, supplies, repairs, insurance, HOA dues, platform fees, property taxes, capital reserves, vacancy, and 14 percent TOT. Peninsula demand often benefits from regional business and visitor travel, and recent regional visitor metrics point to continued recovery that supports lodging demand across the Bay Area. See the latest context from San Francisco Travel.

Taxes and reporting

STR income is taxable at the federal and state levels. Whether you report on Schedule E or Schedule C depends on factors like average stay length and services provided. A tax professional can guide you on depreciation and potential self-employment tax exposure. Review fundamentals in this primer on IRS Publication 527.

Insurance you actually need

Many homeowners policies exclude business activity like STRs. Platform protections are not comprehensive insurance and have exclusions. Get written confirmation of coverage or secure a short-term rental or landlord policy that addresses liability, guest damage, and loss of income. Learn the basics in this overview of STR insurance gaps.

Due diligence checklist before you buy

• Verify eligibility and zoning. Confirm if the property falls under City rules or the County coastal permit program and whether STR use is allowed for your property type.
• Confirm the ADU rule. San Mateo does not allow ADUs to be used as STRs; treat that as a hard stop.
• Read the CC&Rs. Identify any HOA prohibitions on stays of 30 days or less and clarify enforcement history.
• Map out the TOT and licensing steps. Register for TOT, confirm who remits tax, secure your business certificate and STR registration, and plan your recordkeeping.
• Price appropriate insurance. Obtain STR-specific or landlord coverage and verify limits and exclusions in writing.
• Build a conservative pro forma. Use paid market data or local manager comps for ADR and occupancy. Subtract all expenses, including management, cleaning, utilities, insurance, HOA dues, platform fees, repairs, reserves, and TOT.
• Check on-site logistics. Validate parking availability, occupancy capacity, trash and noise plans, and your local contact arrangement.
• Plan for enforcement and exit. Model scenarios where regulations tighten or the permit is revoked. Decide if the property pencils as a long-term rental or standard resale.

Risks and exit planning

Regulatory environments evolve, and many jurisdictions revise STR caps, permits, and platform obligations. Keep an eye on city and county updates and plan for policy changes. For statewide context on shifting rules, see this overview of California STR law trends. Build an exit strategy so you are not dependent on one operating model.

Work with a local advisor

If you are weighing an STR-focused purchase in San Mateo, you deserve clear guidance on the rules, the numbers, and the tradeoffs. With deep Peninsula experience, boutique service, and Compass-backed resources, we help you validate eligibility, pressure-test your pro forma, and negotiate the right property for your goals. Ready to talk through a plan in English, Cantonese, or Mandarin? Reach out to Jlu Real Estate for a focused strategy and a smooth purchase.

FAQs

Are short-term rentals allowed in the City of San Mateo?

• Yes, if you register, obtain a business tax certificate, comply with operating standards, limit unhosted stays to 120 days a year, and collect and remit 14 percent TOT.

How does the 14 percent TOT work for San Mateo STRs?

• You collect 14 percent on rent charged and remit monthly, typically through HdL; confirm whether your platform remits on your behalf and keep detailed records.

Can I short-term rent an ADU in San Mateo?

• No, the City excludes ADUs from STR use, so do not plan on listing an ADU.

What if the property is in unincorporated San Mateo County’s coastal zone?

• You need a County STR permit and must follow County limits, including a typical 180-night unhosted cap, a local contact within 20 miles, parking requirements, and County TOT.

Can my HOA stop me from doing an STR in San Mateo?

• Yes, HOAs may prohibit rentals of 30 days or less if that restriction is in their governing documents, so review CC&Rs before you buy.

Do platforms collect San Mateo TOT for me?

• It depends on the platform and local agreements; you are responsible for ensuring the City receives TOT and that your records match what is remitted.