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Airbnb Property Investment in San Francisco California: Is it a good city to invest in?

airbnb property investment San Francisco

Looking for the perfect city where it offers entertainment, culture, and financial industries? San Francisco has it all! Known as the city and port in Northern California, San Francisco makes 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! 

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 Francisco since it’s fairly popular and does not require you to purchase a property as a start. As long as you adhere to the Airbnb rules in San Francisco, there should be no problems of breaching the laws.


“The Urban Land Institute ranked an Francisco among the top 20 meters in real estate exploration, citing a growing local economy, a young workforce and a long-term sustainable market.
The City of the Bay is considered by many to be the perfect place for both conventional and Airbnb investments.”

– Sexton Group on San Francisco Real Estate Investment

Here’s an interesting fact: San Francisco is one of the best places to Airbnb in California

Airbnb occupancy rates by city state that an average host in San Francisco can earn up to $45,888 during the peak seasons from July – September. With over 4,777 Airbnb listings in San Francisco, it’s certainly a catch for property investors! 

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 Francisco, 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!

Why Invest in a Property in San Francisco?

San Francisco is home to many iconic landmarks such as the Golden Gate, Pier 39, Alcatraz and Fisherman’s Wharf! On top of that, You will have the opportunity to experience the lively environment, delicious dishes and different leisure activities. But what else is there to know? Here are some of the major reasons why you should consider buying a property for Airbnb in San Francisco:

1. San Francisco’s economic growth

San Francisco is a big corporate city as well as one of the fastest-growing cities in the State. The city is home to many large corporate employers and startups that allow it to enjoy a strong economy with a booming job market, in fact, the city has an unemployment rate of 2.0% which is lower than the nation’s average (6.0%).

2. Iconic tourist destination

The tourism sector of San Francisco is an important contributor to the economy here and the good thing is that it’s steadily growing. Based on San Francisco Travel report, the city welcomed over 14.8M in 2021. This info surely will draw the attention of investors who want to cater to tourist accommodations. 

3. San Francisco and its diversity

Considered one of the 15 most diverse cities in the US, San Francisco welcomes everyone with an open mind warmly. The city has an ethnically diverse population as well as progressive values, making anyone feel at home as soon as they arrive here. Plus, they host the largest and oldest pride parades in June, which attracts many locals and visitors alike. 

Expectations When Buying A Property in San Francisco

Aside from the pros of investing in a property in San Francisco, let’s discuss some of the cons so you can know what to expect when living in this fascinating city. It’s always better to look at the two sides of each coin in order to properly set your expectations!

1. High cost of living & expensive real estate

While San Francisco has many positive aspects, sadly, not everything can be perfect. If we talk about the average cost of living and the real estate market, this city stands out, but not in a good way. The cost of living is 94% higher than the national average, quite shocking, right? Moreover, the median property price will also make you think twice before investing here because the current value is above $1.4M.

2. Traffic is a nightmare

We all may agree if I say that getting stuck in traffic is a headache and you can expect that in San Francisco, things like this can become quite overwhelming. Drivers lose around 97hrs in congestion per year here and currently, it ranks eighth among the top 10 cities in North America with the worst traffic.

Best Neighborhoods for Airbnb in San Francisco

Let’s take a closer look at the important Airbnb key metrics to discover which is the most profitable neighborhood in San Francisco. Filtered for a 1-bedroom apartment, here is a brief overview of some of the most recommended and profitable neighborhoods:

airbnb property investment San Francisco

1. Outer Sunset
  • Annual Revenue: $55,106
  • Occupancy Rate: 93%
  • Average Daily Rate: $148
2. Mission District
  • Annual Revenue: $61,296
  • Occupancy Rate: 92%
  • Average Daily Rate: $153
3. Pacific Heights
  • Annual Revenue: $64,178
  • Occupancy Rate: 84%
  • Average Daily Rate: $182

Is Property Investment Profitable in San Francisco?

Using a short-term rental income calculator, it was discovered that a 2-bedroom apartment in San Francisco can generate an annual revenue of $121,491 with a steady occupancy rate of 80% and a nightly rate of $345.

airbnb property investment San Francisco

airbnb property investment San Francisco

Houses for Sale in San Francisco, CA

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 profitable properties and house prices in San Francisco along with the calculated gross rental yield, cash-on-cash return, and annual revenue:

airbnb property investment San Francisco
airbnb property investment San Francisco

1903 E Bayshore Rd Spc 42, Redwood City, CA 94063

1. Studio-type Property for Sale San Francisco
  • 0.8 miles to Taft Elementary School
  • Asking Price: $80,000
airbnb property for sale Ottawa City Center
airbnb property investment San Francisco

1200 W Winton Ave Spc 22, Hayward, CA 94545

2. 1-Bedroom Type Property for Sale San Francisco
  • 0.9 miles Anthony W. Ochoa Middle School
  • Asking Price: $126,000
airbnb property investment San Francisco
airbnb property investment San Francisco

16150 Ashland Ave Spc 50, San Lorenzo, CA 94580

3. 2-Bedroom Type Property for Sale San Francisco
  • 0.1 miles to Edendale Middle School
  • Asking Price: $129,000
3-bedrooms SanFrancisco
3-bedrooms SanFrancisco

876 7th St, Richmond, CA 94801

4. 3-Bedroom Type Property for Sale San Francisco 
  • 0.2 miles Peres Elementary School
  • Asking Price: $299,000
4-bedrooms SanFrancisco
4-bedrooms SanFrancisco

      3499 E Bayshore Rd Spc 114, Redwood City, CA 94063

5. 4-Bedroom Type Property for Sale San Francisco
  • 0.4 miles to Taft Elementary School
  • Asking Price: $180,000


Since Airbnb is rapidly increasing and constantly changing for each city in the world, it is crucial to make decisions based on accurate data. Overall, San Francisco is a great place to invest in since it 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.. However, for investors who have a tight budget, it will be hard to find an affordable property because its average housing value is higher than the national average. But don’t worry because there are many other profitable cities in California that you can explore!

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A Guide for Airbnb Host San Francisco & Top 5 Profitable Airbnb Locations!

Investing in an Airbnb in California is an excellent idea as long as you target the right city. Particularly in San Francisco – where the concept of Airbnb started in 2007! With millions of tourist arrivals annually, this city is becoming more and more popular. Some of the iconic landmarks in San Francisco are The Golden Gate Bridge, Alcatraz Island, and Pier 39. 

If you’re looking for an Airbnb hosting guide & calculate your potential Airbnb income in San Francisco, you’re reading the right article!

We’ll feature some of the Airbnb regulations in San Francisco, a step-by-step guide to hosting, and what to expect when becoming a host. Bonus: We also added the top 5 most profitable neighborhoods in San Francisco – let’s dive in and learn more.

How to become an Airbnb host in San Francisco?

You need to apply for the following requirements in order to become an Airbnb host in San Francisco:

Once your registration is approved, you will need to add the registration details to your listing as part of San Francisco Airbnb regulations. Some of the Airbnb rules in San Francisco will also check your eligibility for hosting. This includes insurance for liability, housing and building codes, and rent control. 

What to Expect as an Airbnb host in San Francisco:

Airbnb hosting can have its own risks and rewards. Owning a property under a mortgage loan is an ideal option instead of renting a property. This is because rent costs in San Francisco can be more expensive! The city is known as the third most expensive city to rent in the USA. Besides, San Francisco is one of the best areas for Airbnb in California.

Here’s what you can expect from hosting an Airbnb in San Francisco:

  • Oversaturated market

There can be tight competition if you choose an area with plenty of existing Airbnbs. Depending on the property’s location, it’s ideal to look for one that’s not too saturated. It can be difficult to promote and pitch your Airbnb and have lesser bookings!

  • Hosting Diverse Guests

San Francisco is known for its cultural diversity. And being an Airbnb host will be a gift that you can take advantage of! You can expect to host various international & local guests in your property. In fact, according to Airbtics, the top-ranking guests in San Francisco are from Germany. Hosting diverse guests is an exciting journey as you learn a thing or two and build connections.

  • Airbnb Profitability: average daily rate, annual revenue, & seasonality

So how much can you earn from doing Airbnb in San Francisco? Airbtics’ data shows that you can earn an annual revenue of $57,059 for operating a 1-bedroom apartment in San Francisco. The following Airbnb data was also discovered:

    • Average Airbnb daily rate in San Francisco: $215
    • Average occupancy rate in San Francisco: 78%
    • Seasonality: 44% (peak season in August)

Best Areas for Airbnb San Francisco Neighborhoods

Targeting the right location for Airbnb will determine your long-term profitability. Discover Airbnb San Francisco neighborhoods and their potential revenue based on the prices for 1-bedroom properties:

1. The Castro District

Home to the LGBTQ community, Castro District is one of the most visited neighborhoods in San Francisco. Tourists can enjoy plenty of cultural surroundings, enjoy the historic movie palace of San Francisco, and explore exciting restaurants. Check out the Airbnb data in Castro District:

  • Average Property Price for sale: $1.78 million 
  • Average Property Price for rent: $2,900  
  • Average Annual Revenue: $57,376
  • Gross Rental Yield: 5.32%
  • Occupancy Rate: 72% 
  • Seasonality: 56%
2. Twin Peaks

If you’re looking to invest in a neighborhood with serene views of San Francisco, then Twin Peaks might be the best one for you! Travelers who want to have a view of Twin Peaks will be able to see the Bay Bridge, and downtown skyscrapers, and even enjoy a smooth hike. An Airbnb host can expect the following expenses and revenue in Twin Peaks:

  • Average Property Price for sale: $1,783,500
  • Average Property Price for rent: $3,391
  • Average Annual Revenue: $96,377
  • Gross Rental Yield: 5.40%
  • Occupancy Rate: 86% 
  • Seasonality: 33%
3. Mission

This neighborhood is popular for its Mexican community – which means excellent Mexican cuisine! The Mission District also offers fine dining restaurants and vintage boutiques. One can certainly enjoy walking by Dolores park and enjoying the murals at Clarion Alley. Here’s what you can expect by being an Airbnb host in Mission District:

  • Average Property Price for sale: $1,350,000
  • Average Property Price for rent: $2,800
  • Average Annual Revenue: $43,941
  • Gross Rental Yield: 3.25%
  • Occupancy Rate: 84% 
  • Seasonality: 39%
4. Fisherman’s Wharf

Fisherman’s Wharf is a perfect neighborhood for travelers with families. Since there are plenty of family-friendly outdoor activities, it’s certainly a pick for hosts who want to enjoy cruises and biking! There are also several excellent waterfront restaurants and shopping centers that tourists can indulge in. Check out the Airbnb profitability in Fisherman’s Wharf:

  • Average Property Price: $1,034,000
  • Average Property Price for rent: $2,604
  • Average Annual Revenue: $43,941
  • Gross Rental Yield: 4.24%
  • Occupancy Rate: 84% 
  • Seasonality: 39%
5. Chinatown

Chinatown is one of the most visited neighborhoods in San Francisco. Known for its cultural diversity, tourists can enjoy several attractions in this area. From visiting Buddhist temples to exploring dim sum and boba restaurants, Chinatown is a definite must-see! Here’s what you can expect to be an Airbnb host in Chinatown:

Average Property Price: $905,000

Average Property Price for rent: $3,500

Average Annual Revenue: $29,612

Gross Rental Yield: 3.27%

Occupancy Rate: 37% 

Seasonality: 73%


Since you have a brief idea of the best areas to start an Airbnb in San Francisco, don’t stop your research here! There are several other neighborhoods that you can explore that can bring the most profit to the Airbnb business.

In summary, Airbnb investments can be risky if market research is not done as the first step. This is where a smart & reliable tool like Airbtics is truly needed! It’s bad enough to waste money and energy on a property that won’t meet your financial expectations. But what’s worse is not taking advantage of resources to avoid losses.

Using an Airbnb profit calculator, you can save time and resources – and strategize based on accurate numbers.

Airbnb Rules Blog posts

Airbnb Rules in San Francisco

Table of Contents
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    Is Airbnb legal in San Francisco?

    The answer is yes! San Francisco passed a law on February 1, 2015, that made short-term rentals permissible. Before this, San Francisco prohibited short-term residential rentals in multi-unit buildings, making Airbnb-style rentals illegal (although the law was rarely enforced). Short-term rentals are subject to some Airbnb Rules in San Francisco under the 2015 law.

    Currently, there are 1,065 Airbnb listings in San Francisco, with 39,2% of entire houses earning up to $3,251 a month, 3% managed by professionals, and 27,5% managed independently. Apart from complete houses, San Francisco’s Airbnb offerings include 12% of private rooms. According to short-term rental data source Airbtics, a 2-bedroom apartment in San Francisco can make up to $56,712 each year.

    airbnb rules in san francisco

    Here we will provide some useful information that can help you better understand the Airbnb rules in San Francisco.  

    Short-Term Rentals Registration
    Taxes and Business Registration
    In San Francisco, hosts must own a current Business Registration Certificate. On reservations of less than 30 nights, San Francisco charges a 14 percent Transient Occupancy Tax (TOT). In San Francisco, Airbnb collects and remits the TOT.
    Occupancy Taxes
    In San Francisco, Airbnb is now the only Qualified Website Company. This means that if you just host through Airbnb, you won’t have to file TOTs or get a separate Certificate of Authority.
    Airbnb data
    Airbnb rules in San Francisco
    Eligibility for Hosting

    Residency Rule for Primary Care- You must live in your listing for at least 275 days every year to register it. If you are present, you can share your entire space, and if you are away, you can rent your entire space for up to 90 days a year.

    Insurance for Liability- The law requires hosts to carry liability insurance of at least $500,000. Our Host Protection Insurance (HPI) service satisfies this rule if you only host with Airbnb.

    Rent Control- Under the Rent Control Administrative Code, you can charge guests the most amount per month.

    Housing and Building Codes- San Francisco has rules and regulations for building construction, design, and maintenance, as well as health and safety regulations. Short-term rentals are not permitted in units that seem to be the subject of a City enforcement action about habitability.

    Operating Requirements for your Listing

    Reporting- By law, you must file quarterly reports in January, April, July, and October detailing the number and dates of your short-term rentals.

    Recordkeeping- You must keep records showing that you are in compliance with the Administrative Code, such as proof of your permanent residency.

    Concerns about safety- The inside of your front door must have a sign indicating the location of fire extinguishers, gas shutoff valves, fire escapes, and pull fire alarms.

    Reference| Airbnb.co

    Pros and Cons of running Airbnb in San Francisco

    Short-term rentals are vacation rental properties rented out on a short-term basis to guests, like hotels.  This form of rental helps guests to feel more at ease and “at home” because the properties are typically designed in this manner.

    A long-term rental is the most common sort of rental property utilized for residential purposes. This sort of rental property is usually protected by a long-term lease agreement with more binding terms than a short-term rental. Renting out their homes for a higher price than their mortgage allows them to generate regular income regardless of the market. Because it is more traditional and well-known, most people are more familiar with this sort of rental property.


    short-term rental vs long-term rental in airbnb rules in san francisco

    Now that we’ve defined vacation rentals and long-term rental properties, let’s look at each component of rental properties that explains both the benefits and drawbacks of a short-term or long-term rental.


    Flexibility You have the option of renting for days, weeks, or months. You can rent as much or as little as you want. There’s also the possibility of going on a trip at any time and earning money while doing so!

    Privacy – Short-Term Rentals are ideal for families. They provide guests with more privacy and space than standard hotels.

    Earns more money than a long-term rentalIt’s simple to calculate: $1500 for a vacation week vs. $1500 per month to rent for a year.

    Good Deductions – There are numerous popular deductions available to rental property owners. Cleaning and maintenance, insurance, management fees, and utilities are just a few of the costs to consider. You may make a loss and avoid paying taxes entirely if you take enough deductions.

    Tax Breaks – Short-Term Rental Owners receive the best home-related tax breaks.

    Less Wear and Tear on the PropertyWith frequent renters, you can keep up with tiny repairs before they become major issues!

    Social Advantages – There are a lot of interesting people in the world, and many of them travel! Your next acquaintances in a Short-Term Rental could evolve into lifelong buddies!


    Inconsistent payments – If you rely on a stable income, a yearly renter is a much safer option. There’s a chance you won’t have a Short-Term Renter for weeks or months.

    Must cover the utilities – Utility costs are usually paid by long-term renters. Short-term tenants don’t.

    Increased risk – There is a higher danger of theft, breakage, or problem tenants because of the number of tourists going through your doors.

    Requires extra effort – Running a Short-Term Rental requires more effort because you are the innkeeper. You’ll be in charge of collecting money, scheduling clients, and bringing in tenants. You’ll do it every week instead of every 5 years or so!

    Additional maintenance expenses – As the landlord, you are responsible for housekeeping, pool maintenance, and general upkeep. Not always the case with a long-term renter.

    Some HOA – Managed neighborhoods make it tough and complicated to rent short-term Rentals. People prefer comfortable, peaceful surroundings where they feel safe and know everyone, rather than random strangers coming and going at all hours. They may submit complaints, and some HOAs may sue Short-Term Rental Owners.


    If you’ve made it this far, you’re thinking of starting an Airbnb.

    We’ve been assisting folks like you, who are first-time Airbnb hosts. We don’t provide consulting since we aren’t experts in running Airbnb businesses; but, we do provide useful data to Airbnb hosts.

    You may use the Airbtics dashboard to figure out how much money you can make doing Airbnb in your city. Unlike other online Airbnb income calculators, it will provide you with a lot more useful information, such as 

    •  which neighborhood to target, 
    •  which amenities are in high demand, 
    •  what is the market’s historical performance, 
    •  what are the occupancy rates of a two-bedroom house, 
    •  should I do a two-bedroom house or a three-bedroom house? 

    In that case, the tool might be too complex for you, visit our tutorials – With the data dashboard, you can get meaningful and actionable insights.

    Well, if you are new, there are many Airbnb host communities on Facebook. Type “Airbnb host” in the Facebook search, and you’ll see plenty of active communities where you can get help from experienced Airbnb hosts. 

    airbnb host arbnb rules in san francisco


    To see full data of San Francisco– Click Here


    Read More – Rental Arbitrage Houston

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