San Diego real estate is one of the best and hottest markets in the US today. If you are looking for a place to invest, it is San Diego. San Diego’s rents and yields are on the rise, its population is growing, demand for rental property is increasing – what’s a better opportunity?
San Diego’s real estate market was ranked the fifth most expensive market in the US in 2015. The average median home price in San Diego is $2,195,000. But if you have the financial ability, now is your perfect chance to invest, whether traditional or Airbnb.
It’s a Landlord Market
The San Diego rental market is currently a landlord market. San Diego’s population is growing and the tourist industry is one of the most successful in the nation. This makes being a landlord in San Diego very profitable. As the demand for rental property continues to increase, and the limited inventory of property continues to exist, landlords are benefiting the most in this equation.
Additionally, San Diego’s college areas are doing very well. You could consider investing in one of the city’s college neighborhoods which have high occupancy rates.
There is one problem when it comes to San Diego real estate. Affordability has become a real challenge. Not only for you as an investor or a landlord, but for tenants as well. At the same time, it is this exact thing that makes San Diego an attractive market.
There’s a Huge Investment Opportunity
The San Diego real estate market has a rather limited inventory when it comes to housing. However, 2016 has seen a rise in construction of property. There is also an emphasis on the construction of single-family homes as opposed to last year’s focus on multi-family homes. This will give you the chance to achieve higher cash flows. The expansion is a great opportunity for the investor and it is proof that San Diego real estate is well positioned and is growing.
Timing is tricky when it comes to investing, and when it comes to San Diego real estate investing, now would be the time to jump in.
It’s Got Great Potential for High Rental Returns
San Diego is the second largest city in California by population and, as mentioned above, is growing at a healthy pace. With a growing population comes growing demand for property that is expected to further rise in 2017. The rising demand in addition to the increase in rents suggest favorable conditions for San Diego investors.
The rise in property value gives the investor the opportunity to receive high rental returns and cash flow. The average rental return for traditional properties in San Diego is $2,520. Of course, figures differ from one neighborhood to the next, but the numbers are very promising.
For more information on rental returns like CoC return, cap rate and other city information, use Mashvisor’s analysis tools to gain more insight. You can research properties in San Diego’s real estate market on Mashvisor and use our comparative analysis tools to figure out where and how best to invest.
Airbnb San Diego is Booming
San Diego has been long known for short-term rentals even long before Airbnb surfaced the scene. After all, San Diego is a top travel destination in the US which hosts nearly 34 million visitors annually. Airbnb San Diego is the fastest growing short-term rental market in the nation. In 2015 alone, Airbnb welcomed 185,000 guests into over 8,000 listings.
Now, with a prosperous tourist industry, and the success of Airbnb itself, investing in Airbnb San Diego is considered a great idea for savvy investors. Our data shows high rental return numbers and low vacancy rates. What is a better mix for an Airbnb investment?
Top Neighborhoods In San Diego
To further understand the benefits and opportunities of San Diego real estate investment, check our list of top neighborhoods and some data analysis.
Pacific Beach is known as a young college neighborhood. Today, more people are starting to move there due to the rise in rent costs. The neighborhood is considered ‘up and coming’ by many and is a great place to invest.
- Median Home Price: $1,099,000
- Airbnb Occupancy Rate: 76.63%
- Average Airbnb Rental Income/month: $5,175
- Average Traditional Rental Income/month: $3,142
North Park’s central location and proximity to many of the city’s facilities make it a popular among many San Diegans as well as tourists. The neighborhood is more affordable than many of the top neighborhoods in San Diego, and it has a mostly young demographic.
- Median Home Price: $469,000
- Airbnb Occupancy Rate: 78.53%
- Average Airbnb Rental Income/month: $5,338
- Average Traditional Rental Income/month: $2,577
Mission beach is a great neighborhood for Airbnb rental investment. It is also a young neighborhood mostly inhabited by those in their 20s and 30s. Many tourists choose to stay in Mission Beach because it is famous for its night life, restaurants, and trendiness.
- Median Home Price: $1,385,000
- Airbnb Occupancy Rate: 75.67%
- Average Airbnb Rental Income/month: $4,740
- Average Traditional Rental Income/month: $2,181
“The Jewel” is considered the home of the wealthy and is known for its luxurious properties. The standard of life in La Jolla is very high. If you are considering investing in this neighborhood, we suggest you lean towards investing in traditional rental properties as both their rental income and well as CoC return are higher.
If you have got the capital, definitely consider La Jolla.
- Median Home Price: $2,195,000
- Airbnb Occupancy Rate: 68.86%
- Average Airbnb Rental Income/month: $3,743
- Average Traditional Rental Income/month: $4,510
Make sure to use Mashvisor’s multiple tools to assess your investment opportunities in the San Diego real estate market and any other market nationwide. Access neighborhood comps to optimize your investment.