San Diego Vacation Rental vs. Regular Rental

10 Replies

Hello BP community, I'm a new member from San Diego. I'm adding a second story to my house with the plan of living on the second story (2bd/2ba) and renting out the first story (3bd/2ba). I live about 2 blocks from the beach and after looking at airbnb and vrbo, I got the idea to use the first story as a vacation rental to increase revenue.

Any thoughts on whether this is a good idea or anything I should be aware of? I know that it'll be more work than a typical rental but I feel that if it becomes too much I can always go back to renting it long term. Appreciate any comments.

I think the biggest question is who will be doing the turnovers between guests. That could be a big hassle and expense.

My second question is - are you off Mission Beach and if so, when can I rent?

I am a big believer that you have nothing to lose. I would try it out and if it becomes too much. If it does try a different plan. When we get to the right location we want to do exactly what you are describing.

Hey @Paul Brockland Welcome to BP!

Your thoughts are on the money about the extra work associated with a vacation rental. To handle turnover, you can set a minimum stay, and you can hire cleaners to get your first story ready for the next guests.

To handle key exchange, you can use a keypad lock that lets you program a temporary code for your current guest.

I looked at all 70 listings on AirBnB west of I-5, between Point Loma and La Jolla in San Diego that have three bedrooms. The average listing per night is $376.

The forecasted vacancy rate is 43%. This means that you can expect your first story to be vacant three nights a week.

If you want to look at the numbers, you can download the spreadsheet here.

Updated almost 4 years ago

Looks like the link to the spreadsheet stopped working. Go here to see the spreadsheet: http://bit.ly/1hO8QHp

Originally posted by @Paul Brockland:
Hello BP community, I'm a new member from San Diego. I'm adding a second story to my house with the plan of living on the second story (2bd/2ba) and renting out the first story (3bd/2ba). I live about 2 blocks from the beach and after looking at airbnb and vrbo, I got the idea to use the first story as a vacation rental to increase revenue.

Any thoughts on whether this is a good idea or anything I should be aware of? I know that it'll be more work than a typical rental but I feel that if it becomes too much I can always go back to renting it long term. Appreciate any comments.

You can also use the Schlage motarized digital bolt locks where you can set remotely programed lock codes to your unit down stairs so that you dont even have to rekey or physically give the keys. You could have an automated email service saying your temporary code will be xxxx for xx/xx/14 to xx/xx/14 once the code is deleted it reverts back to default preprogramed codes (factory set).

Do you currently plan to have the unit listed on vacation rental websites or how did you plan to market it as a vacation rental?

@JOAN DICKIE - My girlfriend and I plan on doing the turnovers at least to start with to save money but you're right it might be too much hassle.
@Evan R. - Thanks for the great info! The spreadsheet is great! Yeah I was also wondering about the logistics for the key exchange.
@Albert Bui - Right now I plan on listing Airbnb, craigslist, Home Away, and/or vrbo as a vacation rental. Do you have any suggestions on marketing the property?

Oh and @JOAN DICKIE I'm actually in Ocean Beach and it should be ready around September :)

@Paul Brockland - please to meet you, I have a vacation rental in Portland that has done well from an appreciation stand point and I thought I was doing really well until I pulled financials and found I was doing "ok". So here are my lessons learned:

1) Ensure to compare your rents for the vacation rental at the occupancy rates suggested by @Evan R. or less. The nightly amount may be excellent, but you will only get it some of the time.

2) Check your zoning! Although VRBO's are not allowed in residential zoned areas in Portland, since their were VRBO's all around my Portland place I took a chance and was busted within the first six months. It was just an inquiry threatening to report me to zoning, but I did not need the hassle or the fine, so I converted it to a 30 day rental.

3) Make sure to factor in the cost to furnish the place - We thought we could get by with 10K and spent almost twice as much to furnish our 3 bed, 2.5 bath. We also did not go high end, and was able to get a lot from Craiglists, but the costs add up, so you have to ensure you can get those costs back as well.

This is all I can think of right now, good luck!

@Paul Brockland Welcome to BP! There's been some threads written on vacation rentals, if you do a search you'll find them.

If you try it out and it's not for you, you can always switch. On the other hand, if you rent it long term, it will take that option away from you.

What is the area where the property is located like ? Is it close to the beach? Restaurants? What is your competition?

@Paul Brockland I'm also curious about the potential VRBO market in San Diego, so please post how well it goes in the coming months.

@Evan R researched some reassuring numbers, so good luck!

Thanks again everyone for the help. Construction should start next month so I'll make sure to post before and after pics and let everyone know how the progress goes.