We will never get tired of repeating over and over again that LOCATION is (nearly) everything in real estate investing. This holds true for both traditional and Airbnb renting. One of the hot spots for Airbnb renting in the US at the moment is San Diego. In this article we discuss some of the most important aspects of Airbnb San Diego and the reasons why you should get an investment property for short-term rents in this beach town in California.
Short-term rentals – though not traditionally called Airbnb – have been going on for decades in San Diego, especially in some neighborhoods like Mission Beach. San Diego enjoys an extraordinarily pleasant climate year-round with an average temperature of 64 degrees.
In the summer, the temperature rarely goes above 80 degrees, while the winter highs range between 60 and 75 degrees. It makes San Diego a popular destination throughout the year.
Related: Best Cities For Airbnb Occupancy Rates
Airbnb San Diego Figures
In a little over a year – between February 2015 and May 2016 – Airbnb San Diego listings increased by 39% including full-apartment home rentals as well as rooms and guesthouses rented out with the homeowner remaining on site.
Airbnb San Diego started with only 4 listings in 2009 (all still active today) and quickly grew to over 8,000 listings in 2016, excluding such that have not been active for the past 6 months. Of these, 38% are entire houses, 24% are apartments, and 5% are condos; the rest are rental properties of various types and sizes.
According to different sources, the number of listings has grown by at least 60% annually for the past several years. In 2015 3,900 Airbnb San Diego hosts welcomed 185,000 guests.
In terms of rental income, in September 2014 Airbnb hosts received about $1 million in estimated revenue, which came mostly from entire homes and excluded revenue from shared rooms. The figure had grown to $8 million by February 2016, and winter is generally a slower season for Airbnb renting.
Neighborhoods
Following the general trend of an increasing popularity for Airbnb San Diego, the number of listings has recently risen in nearly all neighborhoods. However, 6 neighborhoods continue to host about half of all listings. These are:
- Pacific Beach;
- Mission Beach (the oldest short-term rental neighborhood in San Diego);
- La Jolla (which witnessed a 58% increase in the number of listings);
- North Park;
- Ocean Beach (with a 64% increase); and
- East Village.
Meanwhile, 3 neighborhoods actually witnessed a decline in the number of listings: Core-Columbia, Harborview, and Bay Ho. However, keep in mind that these are neighborhoods which already had only few listings.
You can search for current property listings and comparative analytics in the top 6 neighborhoods for Airbnb San Diego on Mashvisor.
2-Bedroom-Apartment Rentals
As the data above show, Airbnb San Diego guests tend to prefer full-2-bedroom-apartment rentals over a shared room or a single room in a shared house or apartment. At least, this is where most revenue comes from. The average monthly rent for a 2-bedroom apartment in San Diego is $2,017. The average Airbnb private room rate is $85, while the average occupancy rate is 71%, quite high for any US city.
Some calculations show that with this Airbnb occupancy rate, having an Airbnb guest in a private room pays for 91% of the monthly rent of the 2-bedroom apartment. In other words, 24 days of bookings per month would be enough to pay the monthly rent. To help you with the calculations, use an Airbnb calculator.
Now, Airbnb night rents are significantly higher for a 2-bedroom apartment, with an average of $226. Subtracting the expected annual expenses, $27,269, from the expected annual revenue, $58,750, yields expected annual profits of $31,481.
Comparison with other US cities show that San Diego along with Miami is the most profitable city in the US for full-apartment listings on Airbnb. The warm weather, the coast, and the relatively affordable housing all contribute to this phenomenon.
Attractions
Now, let’s see what actually makes San Diego an attractive Airbnb destination. Well, to begin with, you have the great climate, the miles of beach, and the surfable waves. Quite not bad, right? However, there is way more to San Diego than simply sunbathing, swimming, and surfing. Below is a list of the most popular attractions in the city and the area around it:
- Balboa Park: This is an enormous, multi-attraction park with numerous museums, performing arts venues, attractions, gardens, and recreational facilities. Some of these include: the San Diego Zoo, the San Diego Air & Space Museum, the San Diego Natural History Museum, the San Diego Junior Theater, the San Diego Youth Symphony, the Australian Garden, the Desert Garden, the Japanese Friendship Garden, the Balboa Park Golf Complex, the Balboa Tennis Club, and many, many more.
- San Diego Zoo: Located in Balboa Park and opened in 1915, the San Diego Zoo hosts 3,700 animals from 650 species on 99 acres.
- San Diego Zoo Safari Park: If the traditional zoo experience is not enough, San Diego also offers a 1,800-acre wildlife preserve, a home for over 3,500 animals representing 260 species, in addition to a botanical garden. This is a fun place for kids and adults alike with various safari tours as well as other activities.
- SeaWorld San Diego: In addition to the beach, water-life-lovers can also enjoy this animal-themed park with an oceanarium, an outside aquarium, and a marine mammal park.
- Petco Park: Home to the San Diego Padres of Major League Baseball (MLB), this baseball park is located in the downtown area of San Diego and offers breathtaking views of the city.
- USS Midway Museum: This is a maritime museum located on the aircraft carrier Midway housing an extensive collection of aircraft.
- Old Town San Diego State Historic Park: Located in the Old Town neighborhood of San Diego, this state protected historical park commemorates the early days of the town hosting many historic buildings from the period 1820-1870.
- Seaport Village: This is a waterfront shopping and dining complex next to San Diego Bay.
- Cabrillo National Monument: Located at the southern tip of the Point Loma Peninsula, this historic monument commemorates the landing of Juan Rodríguez Cabrillo at San Diego Bay on 28 September 1542.
These are just some of the natural, historic, and cultural attractions which make Airbnb San Diego so popular.
Comic-Con
If there is one annual event which will drive Airbnb San Diego reservations through the roof, this is Comic-Con. Since 1970, this few-day event has been attracting more and more participants and visitors, reaching 167,000 people last year.
Comic-Con San Diego has traditionally been taking place in between June and August, settling for July in recent years. This is definitely the one time when you as an Airbnb San Diego host can ask for otherwise inappropriately high rates.
Related: How Much Can I Rent My House For?
Legal Concerns
Unfortunately, the picture is not all rosy for Airbnb San Diego. As this innovative business is gaining more and more popularity, it is normal to expect opposition to this growing phenomenon, mostly coming from community groups and hotel associations.
The expansion of short-term home rentals in San Diego has been accompanied by advocacy for city intervention to limit this type of rentals and/or require certain permits. The lack of city-level legislation has kept the growth of Airbnb San Diego below the rate in other markets in the US.
Airbnb Head of Policy Strategy David Owen says that the problem is the unclear law as there is nothing yet in the law of the actual city that defines short-term rent. Thus, this is something which San Diego policy-makers need to consider soon if they want to keep the positive trends in the city.
All in all, San Diego offers amazing opportunities for Airbnb property hosts, so you should definitely consider it for your next real estate investment.