I would be leery of purchasing in the city of San Diego relying on short term rental because of the San Diego environment relating to STR. Annually the are regulations proposed to restrict San Diego STRs.
Therefore any property purchase should be able to generate a profit as an LTR otherwise the risk seems too high.
The city of San Diego has been trying figure out a way to come up with a plan that will work for both parties for a while now. Being a tourist destination hotel taxes are a huge source of income for the city but at the same time it does not seem as though the city is completely against the idea either. Here is a story about the most recent attempt by the city to come up with a plan (spoiler: they didn’t come up with a plan, but this should catch you up with what is going on!)
You would have to register the property as Dan mentioned but there still could be a way to make everything work. A lot of people are doing it so it must be working for someone! Here is the link to the local registration and tax implications...
I would be happy to send you some local listing of properties that could work for you and then we can make a plan to take a look when your down in May!
Hope this helps!
We have 2 STR units that have provided outstanding ROI. However an investment in San Diego city that relies on STR is a risky investment. Proposed regulations have run the gamut to not much impact to virtually eliminating them for non-owner occuppied.
This implies that any investment in San Diego RE should be financially viable as an LTR.
Hey @John Parshall
As others have mentioned, the current legislative landscape leaves the outlook on the viability of STR investments in SD a bit up in the air.
However, as @Dan Heuschele stated, ensuring that the property is viable as a long-term rental will drastically reduce the risk associated with that uncertainty.
If you were thinking about buying a vacation rental in a more coastal neighborhood like Mission Beach or La Jolla (where the cost essentially necessitates the escalated income of an STR), I would likely advise you to wait to see where things go legislatively.
However, the neighborhood you mentioned are not necessarily in that same category. North Park, South Park, and the other areas surrounding Balboa have properties that will do well for you as a STR, but are much more reasonably sustained if you were forced to transition to longer-term tenants.
Let’s get together while you’re in town to further discuss the current market dynamics and take a look at a few properties that will work with your goals/level of risk aversion.
I’ll shoot you a PM now to coordinate.
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