San Diego, California, renowned for its idyllic weather, stunning coastline, and vibrant city life, has emerged as a popular destination for travelers worldwide.
As a result, the short-term rental market in San Diego has experienced significant growth in recent years.
In this guide, we will delve into the key aspects of this market, including market trends, regulations, financial considerations, and factors that make San Diego an attractive location for short-term rentals.
Market Overview
To gain a better understanding of the short-term rental market in San Diego, let’s explore some important data points
Supply
As of October 2024, the most popular homes are 3-bedroom homes, comprising 24.91% of inventory. This is followed by 2 and 1-bedroom homes at 24.24% and 22.34% of the total inventory, respectively.
Homes Appreciation
As of October 2024, according to Zillow, homes in San Diego experienced an appreciation of 8.65%. This data indicates a significant increase in property values. San Diego ranks #5 on Chalet’s list of top Airbnb markets for home appreciation over the past year.
Median Home Value
As of October of 2024, Homes in San Diego have appreciated by 8.65%. The median home value in San Diego is $1,013,179 as reported by Zillow. This figure highlights the city’s robust real estate market and the potential for long-term property appreciation.
Active Short-Term Rentals
As of October 2024, San Diego boasts a significant Airbnb rental market, with approximately 9,343 active rentals. This abundance of available properties provides ample opportunities for investors and homeowners looking to capitalize on the tourism demand.
Average Daily Rate
The median ADR for the market is $222. The Average Daily Rate is the highest for 5-bedroom homes ($610) followed by 4-bedrooms and 3 bedrooms at $545 and $467 respectively.
Occupancy Rate
Chalet data reveals an occupancy rate of 72% for Airbnb rentals in San Diego. This high demand ensures a consistent stream of income for property owners and investors.
How Profitable is Airbnb in San Diego ?
As of October 2024, the average gross yield, which represents the annual income generated by a property as a percentage of its value, is 5.43 in San Diego. This figure suggests that short-term rentals in the city offer a favorable return on investment. San Diego is ranked #90 by return on investment on Airbnb rentals in the United States.
Annual Revenue
According to Chalet, short-term rentals in San Diego earn an average of $37,146 annually, highlighting the strong investment potential in the city’s market. You can evaluate your properties using our free Airbnb calculator.
Top Places for Airbnb in San Diego
San Diego’s top submarkets for Airbnb investments include areas like ZIP code 92119, which has the highest gross yield at 9% and an annual revenue of $85,497. In contrast, ZIP code 92109 offers more extensive opportunities with 4,398 full-time listings, but a lower gross yield of 4%.
Home values also vary significantly, with properties ranging from $738K in 92139 to $1.5M in 92109, making each submarket unique in terms of investment potential and entry cost.
Hosts
Property management firms dominate the market. The largest host is Vacasa with 4.01% of the total inventory and an average review of 4.46 ⭐️s .
Property Tax
According to SmartAsset, the average property tax in San Diego is 0.75%. This relatively moderate tax rate is an important consideration for those looking to invest in short-term rental properties.
Guests
The majority of the guests in San Diego come from California and are within driving distance. 6%% of all guests are from Los Angeles followed by San Diego with 5%.
Regulations
San Diego’s short-term rental regulations are somewhat investor-friendly, with different zoning regulations and limitations in place. Understanding these regulations is crucial for potential investors to ensure compliance and a smooth operation.
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Answering Key Questions
Now that we have examined the market data, let’s address some important questions about San Diego, CA, and its short-term rental market.
1. What is the median household income in San Diego, CA?
The median household income in San Diego, CA, is $79,673, according to the U.S. Census Bureau. This figure provides insight into the economic profile of the city and indicates the spending potential of both local residents and potential short-term rental guests.
2. What is the climate of San Diego, CA?
San Diego enjoys a Mediterranean climate characterized by mild, wet winters and warm, dry summers. The city experiences average temperatures ranging from 57°F (14°C) in winter to 75°F (24°C) in summer, making it an attractive destination throughout the year.
3. What is the population size of San Diego, CA?
As of the latest available data, the population of San Diego, CA, is approximately 1.43 million residents. The city’s significant population contributes to the demand for short-term rentals, both from locals and visitors.
4. What sports teams are based in San Diego, CA?
San Diego is home to several professional sports teams, including the San Diego Padres (Major League Baseball) and the San Diego Chargers (National Football League). These teams generate additional tourism and contribute to the vibrancy of the city.
5. What colleges are located in San Diego, CA?
San Diego is known for its prestigious educational institutions. Some of the prominent colleges and universities in the area include the University of California, San Diego (UCSD), San Diego State University (SDSU), and the University of San Diego (USD).
6. What is the crime rate in San Diego, CA?
San Diego has a relatively low crime rate compared to other major cities in the United States. According to recent data, the city’s overall crime rate is 29% lower than the national average. This factor contributes to the city’s appeal as a safe and desirable destination for visitors.
7. Where are the visitors coming from to San Diego, CA?
Visitors to San Diego come from a diverse range of locations. Popular sources of tourism include domestic visitors from other states in the U.S., as well as international travelers from countries such as Canada, Mexico, the United Kingdom, Germany, and Japan.
8. What is the total number of visitors to San Diego, CA?
San Diego attracts a substantial number of visitors each year. In 2019, before the COVID-19 pandemic, the city welcomed over 35 million visitors, including both leisure and business travelers. This high volume of visitors contributes to the demand for short-term rentals.
9. What are the biggest tourist attractions in San Diego, CA?
San Diego offers a plethora of tourist attractions that cater to a wide range of interests. Some of the city’s most popular attractions include:
- Balboa Park: A sprawling urban park that houses museums, gardens, theaters, and the famous San Diego Zoo.
- USS Midway Museum: A museum located on the aircraft carrier USS Midway, showcasing the rich naval history of San Diego.
- Coronado Island: A picturesque island with beautiful beaches, upscale resorts, and the iconic Hotel del Coronado.
- La Jolla Cove: A stunning coastal area known for its scenic beauty, tide pools, and opportunities for snorkeling and scuba diving.
- Old Town San Diego State Historic Park: A historic district that preserves and celebrates San Diego’s early history through restored buildings, museums, and authentic Mexican cuisine.
10. When is the peak season in San Diego, CA?
San Diego experiences a peak tourist season during the summer months, from June to August, when visitors flock to the city to enjoy the warm weather and beach activities. Additionally, major events and festivals throughout the year, such as Comic-Con International and the San Diego County Fair, attract large numbers of tourists.
Conclusion
The short-term rental market in San Diego, CA, offers promising opportunities for investors and homeowners looking to profit from the city’s thriving tourism industry. With favorable market conditions, high occupancy rates, and a range of attractions, San Diego proves to be an attractive destination for visitors from around the world. By understanding the market dynamics, regulations, and key aspects of the city, individuals can make informed decisions when considering short-term rental investments in San Diego.
