The California market has managed to stand out as the most valuable one in the US. But how profitable would it be to invest in Airbnb San Diego?
If you think about the US as a separate market, 45 countries have witnessed a rise in home prices; however, their overall value has not waned. Real estate agents and investors continue to show great interest in investing in this area.
However, to navigate the most profitable location for your investment plans, you still need to get into the essence of the real estate market and explore its possibilities and limitations. Luckily, we are here to make that job easier for you and help you navigate the San Diego real estate market.
We’ll be getting into the topic of California real estate, investment opportunities in San Diego, what neighborhoods you should turn your attention to—and more.
Table of contents
Scroll down to find out more about this lucrative location.
California Real Estate Market: How Is It Doing?
First and foremost, let’s look at the issue at hand from a slightly broader perspective. And by that, we mean that we should set aside a portion of our time to check out how the California market is doing so far—and what are some possible predictions for 2022.
For starters, if you were hoping that home prices would fall in 2022, consider your hopes and dreams shattered. Most experts and legitimate resources will tell you otherwise.
Although it cannot be said with certainty—because things in such a large market are subject to change—you will still see a rise between 4% and 6% in home prices.
Now, if we turn our attention to the economy for a second (and we’ll mention why it’s vital to us), we can see that California managed to “float above water” when it comes to a massive strike that was COVID-19.
The economic situation has a solid leg to stand on. The only thing that stands out as the potential threat to real estate agents looking to invest in Airbnb San Diego is inflation.
It has already been shown to impact consumer sentiment. However, there is still time to turn things around.
Rising Mortgage Rates: 2022 Predictions
The San Diego real estate market—and the entire US—will witness an all-time rise in home mortgage rates.
Here’s a fact to back that up:
According to statistics, the average mortgage rate for a 30-year plan is 3.84%. However, it can be rounded up to 3.9% by the end of the year, without exaggeration. Places where mortgage rates are below 3.5% will slowly cease to exist; by 2023, we should expect an increase of over 4%. But let’s leave it to the experts to deliver the final information.
If you recall, we mentioned the economic situation a moment ago, and here’s why it’s such a crucial factor to consider:
With inflation knocking on the California real estate market’s door, the inventory seems to be at its lowest point, which brings us to the demand for construction in the state. With low inventory, it is said that construction and supply will increase and will continue to do so throughout 2022. As a result, you’ll see a lot of new blueprints for homes during the rest of the year.
The San Diego Real Estate Market: Why It’s Popular?
We’re sure that the news has reached you by now. Many real estate experts have been speculating about the possible crash of the real estate market in 2022, which is bound to impact all California investment properties.
We’re here to declare that it is not true and that things for Airbnb San Diego are looking pretty good. So as not to leave you speculating over this, here’s why we think that.
Attractive to Home Buyers
From July 2021 up until now, San Diego held the reputation for being a solid seller’s market, and realtors should know how to take advantage of that.
It’s nothing new. Inflation will get to every corner of the US real estate market, but San Diego investment properties will remain attractive to investors looking to purchase a home here. Currently, there are more people who are relentlessly looking to buy a house than there are actual houses presently available.
It’s something that’s been happening for quite a while now, but the question is—will it last? Well, it’s highly possible.
Contributing to it is a steady rise in employment, which shifted from 2.8% to 3% in 2022. People from California and many other US states are moving to San Diego precisely because of the increase in employment opportunities, making it a lucrative location for investors.
It appears that Airbnb San Diego is far from suffering a crash in 2022.
High Turnover Figures
The thing you might be unaware of but that might be crucial to your Airbnb analysis is that San Diego’s shown high turnover figures because of its military population.
To introduce the story first, turnover rates concern homeowners who decided to move out of their homes and put them up for sale. And to be more precise, “turnover” in real estate terms reflects the number of years it takes for total sales to match the number of properties in that area.
Exhibit A: San Diego Airbnb. Consequently, many of San Diego’s residents are in the military, making it harder for them to maintain a property where they are rarely present.
This unique situation contributes to the growing interest in starting an Airbnb business in San Diego. When paired with a suitable work ethic and a conducive environment for investing, home buyers are left with high turnover figures and profits—which certainly goes in their favor.
Foreclosures
While foreclosures are the last thing some of you want to see, for others, it is an opportunity to invest in Airbnb San Diego and expect high returns.
It all started somewhere amid COVID-19 when foreclosures were put on pause because of the unstable economic situation. However, the foreclosure ban officially ended in July 2021.
Many homeowners, unfortunately, were still unable to meet all their obligations, and their homes were listed for sale. The good thing about it is that foreclosures can actually lead to price reductions in properties, which is great news for investors.
With the increasing demand for construction and foreclosures acting as an additional tool for investors, this could potentially create fertile ground for investing in Airbnb San Diego CA.
Airbnb San Diego Statistics
We are practically “blind” without concrete numbers in the Airbnb business.
Looking into Airbnb in San Diego, it is time to pay attention to specific statistics and numbers that will help us make a well-calculated decision.
Here’s what the San Diego real estate scene looks like right now, according to Mashvisor’s latest Airbnb data:
- Number of Listings For Sale: 479
- Median Property Price: $1,128,479
- Average Price per Square Foot: $818
- Number of Airbnb Listings: 4,820
- Monthly Rental Income: $4,267
- Cash on Cash Return: 1.97%
- Daily Rate: $220
- Airbnb Occupancy Rate: 64%
- Days on Market: 48
- Walk Score: 54
Real estate investment tools will help you keep up with current trends and expected returns in the area you’re researching.
We recommend looking at what Mashvisor’s Rental Property Calculator can do for you. Using the calculator, you be able to calculate how your investment plan affects the rate of return—and many more key parameters.
With Mashvisor’s Rental Property Calculator, you can find out the impact of your investment plan on your rate of return.
Profitable Neighborhoods
Before you hop over to our Airbnb calculator, we’ll try to narrow down your search further by mentioning some of the neighborhoods that are definitely worth taking a look at in 2022, based on the latest Airbnb data from Mashvisor.
Mission Beach
We’re giving a distinct advantage to Airbnb San Diego Mission Beach because it is the most researched neighborhood in the city.
- Number of Airbnb Listings: 379
- Monthly Rental Income: $6,635
- Cash on Cash Return: 0.67%
- Daily Rate: $173
- Occupancy Rate: 67%
The other neighborhoods below are arranged according to their cash on cash return, from the highest to the lowest:
Mission Bay Park
- Number of Airbnb Listings: 433
- Monthly Rental Income: $4,820
- Cash on Cash Return: 3.17%
- Daily Rate: $326
- Occupancy Rate: 67%
North Park
- Number of Airbnb Listings: 209
- Monthly Rental Income: $3,616
- Cash on Cash Return: 2.64%
- Daily Rate: $145
- Occupancy Rate: 77%
Pacific Beach
- Number of Airbnb Listings: 483
- Monthly Rental Income: $6,003
- Cash on Cash Return: 1.85%
- Daily Rate: $257
- Occupancy Rate: 66%
East Village
- Number of Airbnb Listings: 227
- Monthly Rental Income: $2,119
- Cash on Cash Return: 1.64%
- Daily Rate: $207
- Occupancy Rate: 42%
They are some of the most profitable locations that will help make your investment plans come true in 2022. Although Mission Beach is one of the most researched, you’ll notice that Pacific Beach’s monthly rental income is the highest among the different locations listed above.
The above parameters are just the beginning of your research. What will further help you make an intelligent decision is examining Airbnb comps.
San Diego: Favorite Destination For Family Vacations
You’ll undoubtedly agree when we say that the first—and often most prominent—reason for investing in Airbnb San Diego comes from short-term vacation rentals.
If we’re on the same page about it, the following statement will make perfect sense:
San Diego has been—and will probably continue to be for years to come—among the most popular destinations for family vacations. And that’s precisely what brings you profit.
If you’re not familiar with the many attractions in San Diego, we’re here to add to your already existing real estate knowledge. So, here are several reasons why someone may choose San Diego over some other sunny place in California.
Balboa Park
The Balboa Park in San Diego is not your ordinary park where you can plan your afternoon picnic. The park stretches over 1,200 acres and offers all kinds of entertainment, including museums, amusement parks, gardens, and the one and only San Diego Zoo.
If you’re focused on making families with kids your primary tenants and residents, this is the perfect reason to think more seriously about investing in Airbnb San Diego.
Old Town
History lessons seem to be more exciting and engaging when they’re “live,” and that’s what San Diego offers its visitors.
The Old Town is one of the oldest enclave towns that allow you to travel back in time for a second and learn more about the first European settlement in what is now California. But it’s not just a ghost town. The city is equipped with a museum, park, and many local restaurants and shops where you can buy everything you need to get through the day.
La Jolla
The third reason for investing in Airbnb San Diego is the magnificent beaches—California’s most treasured asset.
Located a mere 30 minutes from downtown San Diego, La Jolla offers a sense of heaven on Earth. You can come and stay all day, all the way to the sunset—which is pure magic. Families and youngsters will definitely enjoy spending their summer break here.
Tips for First Time Investors
We realize that many of our readers are just starting their investment career. The articles and guides like the one we’ve provided here are the things that help them form a solid foundation.
With that in mind, if you’re new to investing and are interested in Airbnb San Diego, here are some simple-but-proven tips that may come in handy:
- Establish a solid investment plan.
- Make tax efficiency your primary concern.
- Periodically review your investments.
- Use investment tools for more accuracy.
- Research your options.
We know the above is just scraping the surface, but it’s always good to review the vital points from time to time—they will help you stay focused.
Airbnb San Diego: The Verdict
That’s about it on investing in San Diego Airbnb. Finally, let’s go through the essential points.
When it comes to the state of California and San Diego housing market, it will continue to be suitable for investors who are looking to make a profit. While mortgage rates continue to rise globally, foreclosures seem to still allow room for high returns.
When it comes to San Diego, you should turn your attention to specific neighborhoods, such as Mission Beach and North Park, for example.
For all your potential questions, Mashvisor is just a click away. Sign up for a 7-day free trial of Mashvisor, followed by a 15% discount on your quarterly subscription.