Last updated on June 21st, 2023
airbnb property investment san diego
San Diego’s beautiful sunny weather and white sand beaches make it perfect for anyone who wants to relax and be productive with outdoor activities at the same time. While many travelers consider this city on their travel bucket list, it’s most certainly a thrill for property investors too!
Considered one of the best cities to start Airbnb in the USA, San Diego is a haven for tourists and young professionals alike, which is perfect for property investors who want to earn a passive income by owning properties.
To begin with, the major costs and potential revenue should be considered before deciding to purchase a property. Another excellent option is to do rental arbitrage in San Diego, since it’s fairly popular and does not require you to purchase a property as a start.
.
“San Diego is an appreciation market, so theoretically, most homes purchased in the county will increase in value over time. There is strong demand for homes, but not enough supply.”
– By Olivia Black on San Diego Real Estate Investment
Here’s an interesting fact: San Diego is one of the best places to Airbnb in California!
Aside from looking at a property’s fascinating architectural design, proximity to major tourist areas, and accessibility to the best go-to places, the primary step is to determine profitability. In this article, we’ll discuss the metrics in order to gauge the best property investment.
This includes the best website recommendations for property investment in San Diego, property gross rental yield, cash-on-cash return, and annual revenue, along with some of the most ideal and profitable properties according to their location. Stoked to learn more? Continue reading!
Pros of buying an Airbnb Property in San Diego
It’s a fact that San Diego is a captivating city with almost perfect weather and picturesque beaches. From a variety of shopping options to renowned theme parks, San Diego certainly has something to offer to everyone and you will never get bored here! However, there’s more to learn as to why we recommend purchasing a property in this city. Here are some of the major reasons why you should consider buying a property for Airbnb in San Diego:
1. Popular tourism destination
It’s undeniable that San Diego is one of the major tourist hotspots in Southern California and the tourism sector plays an essential role in San Diego’s economy as it brings a lot of tax revenue! Around 35M travelers visit this city annually to experience its fun recreational activities and lively atmosphere. This certainly is interesting info for investors who want to cater to tourist accommodations.
2. Booming job market
San Diego is home to many large businesses and startups that allow it to enjoy a strong economy with a booming job market that is mainly based around sectors like healthcare, tourism & accommodations and manufacturing. In fact, the city has an unemployment rate of 2.7% which is lower than the national average of 6.0%.
3. Low crime rate
Safety is always a concern for homeowners and is always best to be aware of everything because we know that crime is something that can happen when you least expect it. Yet, San Diego is a quite safe city as its crime rate is 23 per one thousand residents and the chance to become a victim of property crime is 1 in 52.
Cons of purchasing a property in San Diego
Now that we know the pros of investing in San Diego, let’s take a quick look at some of the cons. It’s always better to look at the two sides of each coin in order to properly set your expectations!
Cost of living & real estate in San Diego
San Diego is a captivating city and while it has positive aspects, we also need to analyze its downsides, for example, the housing market and cost of living. The median property price is near $900K with a 1-year value change of 7%. On the other side, the living cost is 50% more expensive than the US average.
airbnb property investment san diego
Is Property Investment Profitable in San Diego?
Using an Airbnb income calculator, it was discovered that a 2-bedroom apartment in San Diego can generate an annual revenue of $63,610 with a steady occupancy rate of 76% and a nightly rate of $181.
airbnb property investment san diego
Cheap Homes for Sale in San Diego
Finding the best properties that have the potential to produce high yields and capital growth are certainly some of the preferences of major investors. It’s always best to ask for assistance from real estate agents to access exclusive and unique properties during the development stage.
At the same time, it’s even better when a property investor like you conducts research about predicted growths and market forecasts. Here are some of the homes for sale in San Diego under 300k, along with the calculated gross rental yield, cash-on-cash return, and annual revenue:
1315 Pepper Dr Spc 64, El Cajon, CA 92021
1. Studio-type Property for Sale San Diego
- 0.2 miles to W. D. Hall Elementary School
- Asking Price: $139,900
| GROSS RENTAL YIELD | 24.00% |
| ANNUAL REVENUE | $33,355 |
| CASH ON CASH RETURN | 46.22% |
2621 Sweetwater Rd SPACE 72, National City, CA 91950
2. 1-Bedroom Type Property for Sale San Diego
- 1.3 miles to Lemon Crest Elementary School
- Asking Price: $129,900
| GROSS RENTAL YIELD | 29.33% |
| ANNUAL REVENUE | $38,099 |
| CASH ON CASH RETURN | 62.22% |
8661 Winter Gardens Blvd Spc 16, Lakeside, CA 92040
3. 2-Bedroom Type Property for Sale San Diego
- 0.3 miles to Oakland Elementary School
- Asking Price: $224,900
| GROSS RENTAL YIELD | 25.46% |
| ANNUAL REVENUE | $58,531 |
| CASH ON CASH RETURN | 50.61% |
4958 Old Cliffs Rd, San Diego, CA 92120
4. 3-Bedroom Type Property for Sale San Diego
- 0.6 miles to Foster Elementary School
- Asking Price: $299,000
| GROSS RENTAL YIELD | 28.94% |
| ANNUAL REVENUE | $86,543 |
| CASH ON CASH RETURN | 61.07% |
6333 College Grove Way Unit 11202, San Diego, CA 92115
5. 4-Bedroom Type Property for Sale San Diego
- 1 mile to Vista La Mesa Academy
- Asking Price: $449,000
| GROSS RENTAL YIELD | 25.00% |
| ANNUAL REVENUE | $112,265 |
| CASH ON CASH RETURN | 49.24% |
Conclusion
San Diego can generate a nice cash flow for property investors as long as the right neighborhood is targeted and potential revenue is calculated using an Airbnb rental arbitrage calculator. While there are many other cities to invest in California aside from San Diego, it’s definitely worth the time & effort to speak with a short-term rental expert to make the wisest decision for property investment. But still, considering its housing market and cost of living are higher than the nation average, then this market may not be suited for investors with a limited budget.
