Regulation has always been a live risk in markets heavy with short-term rentals, and it belongs in your underwriting directly. When a city tightens or bans short-term use, any property that only cash flows as a nightly rental, and wouldn't work as a standard long-term rental, can get forced into a sale. Rancho Mirage, for example, moved from allowing short-term rentals to requiring a 28-day minimum stay, which effectively ended nightly renting there. The money at stake is real. On one of our own desert rentals, the short-term rate ran well above the long-term equivalent, on the order of 150 percent of a standard month when booked by the week: roughly $8,000 a month seasonally short-term versus an estimated $2,500 to $2,800 a month as a plain long-term rental. When regulation removes the short-term option, that premium disappears, and it can pressure both income and value in areas that had priced in nightly-rental cash flow. The durable lesson: don't buy a property that only works as a short-term rental unless you can also carry it as a long-term one. Check each specific city's rules and pending ordinances before you close, since some jurisdictions grandfather existing permits and phase them out as they expire. Local regulations vary widely and change often, so confirm them directly.