San Diego Coastal Town STR feasibility

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San Diego Coastal Town STR feasibility

Deron AmadorPro Member
Member since 2024 · 2 posts · 0 votes

Hello Bigger Pockets community!

I am just starting my RE investing journey. Are there any BP members out there with experience in the San Diego coastal town STR market? Looking at Point Loma, La Jolla, Solana, Cardiff, Encinitas and Carlsbad areas. Is the game in San Diego even worth playing? I have a lot of personal stock in San Diego and know the area very well, but not sure the regulations, taxes, and price to entry make the area worth it. Would be more of an appreciation play for me, cash flow not so necessary.

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Dan H.Pro Member
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
3mo
Quote from @Deron Amador:

Hello Bigger Pockets community!

I am just starting my RE investing journey. Are there any BP members out there with experience in the San Diego coastal town STR market? Looking at Point Loma, La Jolla, Solana, Cardiff, Encinitas and Carlsbad areas. Is the game in San Diego even worth playing? I have a lot of personal stock in San Diego and know the area very well, but not sure the regulations, taxes, and price to entry make the area worth it. Would be more of an appreciation play for me, cash flow not so necessary.


Some of those locations are city of San Diego. City of San Diego has STR quotas. For traditional full time, not OO, STRs there are 2 categories (in reality there are 4 categories but 2 relevant to what you are interested in). One is mission beach. Likely the best STR market in the city of San Diego. Mission beach hit its STR quota at the initial lottery. The other is for the rest of San Diego and last I heard had still not hit the quota. This implies pt Loma and La Jolla have STR permits available.

Now for the financial viability …. My mission beach STRs have done outstanding. Our pt Loma STRs have done ok but I have a rockstar co-host with a killer rate. I believe most properties would be more profitable as a LTR than STR, We do not have any La Jolla STRs.

Solana beach, Encinitas, Carlsbad, and Cardiff are not city of San Diego and have different regulations.   I have no STRs in any of those locales.

Good luck

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  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    3mo
    Quote from @Deron Amador:

    Hello Bigger Pockets community!

    I am just starting my RE investing journey. Are there any BP members out there with experience in the San Diego coastal town STR market? Looking at Point Loma, La Jolla, Solana, Cardiff, Encinitas and Carlsbad areas. Is the game in San Diego even worth playing? I have a lot of personal stock in San Diego and know the area very well, but not sure the regulations, taxes, and price to entry make the area worth it. Would be more of an appreciation play for me, cash flow not so necessary.


    Some of those locations are city of San Diego. City of San Diego has STR quotas. For traditional full time, not OO, STRs there are 2 categories (in reality there are 4 categories but 2 relevant to what you are interested in). One is mission beach. Likely the best STR market in the city of San Diego. Mission beach hit its STR quota at the initial lottery. The other is for the rest of San Diego and last I heard had still not hit the quota. This implies pt Loma and La Jolla have STR permits available.

    Now for the financial viability …. My mission beach STRs have done outstanding. Our pt Loma STRs have done ok but I have a rockstar co-host with a killer rate. I believe most properties would be more profitable as a LTR than STR, We do not have any La Jolla STRs.

    Solana beach, Encinitas, Carlsbad, and Cardiff are not city of San Diego and have different regulations.   I have no STRs in any of those locales.

    Good luck

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  • Andrew SteffensBusiness Member
    Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
    3mo

    Personally I would be worried about CA tenant/landlord laws.  Im no expert, but make sure if you go through with a purchase you are properly prepared.  About 1/3 of my clients here in FL are from CA.  

    Good luck!

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  • Ashley Bitner
    Member since 2022 · 79 posts · 44 votes
    3mo

    I'm operating an STR in Oceanside! We bought in 2010, it was a bank owned foreclosure, and we have a 2.6% interest rate. I don't know how people that are buying right now with prices and rates so high are managing to swing it in the STR space.

    1Reply
  • Deron AmadorPro Member
    OP
    Member since 2024 · 2 posts · 0 votes
    3mo
    Thank you for the input, all. I’m born and raised in San Diego but left for my career. Plan to retire back there one day so my ultimate goal for this particular investment is to transition the STR into my retirement home in 25 years. Even with a substantial down payment it’s looking like my hope to have enough cash flow just cover the mortgage is a tall order.
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  • Angela Venger
    Member since 2026 · 47 posts · 21 votes
    3mo

    The STR game is worth playing in every market. It depends on what your budget is for the property and what budget you have for amenities. The more unique amenities you provide, the more likely you are to stay on top and make cash flows.

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  • Adam KingBusiness Member
    Real Estate Agent · San Diego, CA · Member since 2023 · 87 posts · 45 votes
    3mo

    Hi @Deron Amador, I think you're asking exactly the right question, and I'd much rather own the right property in San Diego for the next 10 to 20 years than chase cash flow in a market I don't believe in long term.

    I've helped clients purchase and manage STRs all over the county, including coastal markets like Pacific Beach and Point Loma. While every deal needs to make sense, the long term upside in the right locations has been hard to ignore.

    The biggest thing I'd caution you on isn't the home prices. It's the regulations. Pacific Beach and Point Loma operate under the City of San Diego's STR permit system, which is fairly well established once you understand the rules. Encinitas and Carlsbad are a different story. They have much more restrictive STR regulations, so it's important to understand what is and isn't allowed before you get too attached to a property.

    Since you already know San Diego well, you're already ahead of most investors looking at this market. The key is identifying the neighborhoods and property types that align with your goals while avoiding the regulatory pitfalls that can derail an otherwise great investment.

    If you're serious about buying here, shoot me a message. I'm happy to share what I've learned from helping clients acquire and manage STRs across San Diego, and I'd be glad to help you evaluate a few properties before you make an offer.

    [email protected]619-818-2814
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  • Ashley Bitner
    Member since 2022 · 79 posts · 44 votes
    3mo

    Yeah, Carlsbad is tough. You're limited to the coastal zone which is pretty much that area west of the 5 near the village where houses are going for probably $3-4m .. or the Aviara area but I imagine all of those have HOAs which wouldn't allow a STR.

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  • Garrett CrosbyPro Member
    Real Estate Agent · Los Angeles, United States · Member since 2021 · 392 posts · 162 votes
    3mo

    Deron, I'm based in LA and work with investors along the Southern California coast, so I can give you a pretty direct take on this.

    The San Diego coastal STR market is one of the most appealing in California for obvious reasons - demand is strong, tourism is consistent, and the coastal towns you listed (La Jolla, Encinitas, Carlsbad) are genuinely desirable destinations. But you're right to be cautious about the regulatory and entry cost picture.

    Here's the reality check: STR regulations in San Diego have tightened significantly over the past few years and continue to evolve. The City of San Diego now requires a license, caps whole-home STR licenses at 1% of the city's total housing units (with a lottery system for new applicants), and limits primary-home operators differently than investor-owned units. The North County coastal cities (Encinitas, Carlsbad) each have their own rules and some are more restrictive than others. You need to verify the current ordinance for each specific city before buying, not after.

    On the appreciation angle - yes, SD coastal properties do appreciate. But you're paying a steep price for that appreciation potential with entry prices that already price in a lot of future growth. If your plan is appreciation + some STR income to offset carrying costs, that can work, but you need to underwrite it conservatively and make sure the numbers make sense even if occupancy is lower than the rosy Airbnb projections suggest.

    Bottom line: It's worth playing, but do your regulatory homework first. The permit/license situation is the most important thing to get clear on before you buy.

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  • Vijay FriedmanBusiness Member
    Miami, FL · Member since 2026 · 766 posts · 123 votes
    3mo
    Quote from @Deron Amador:

    Hello Bigger Pockets community!

    I am just starting my RE investing journey. Are there any BP members out there with experience in the San Diego coastal town STR market? Looking at Point Loma, La Jolla, Solana, Cardiff, Encinitas and Carlsbad areas. Is the game in San Diego even worth playing? I have a lot of personal stock in San Diego and know the area very well, but not sure the regulations, taxes, and price to entry make the area worth it. Would be more of an appreciation play for me, cash flow not so necessary.

    @Deron Amador
    Those are great markets, but I'd spend as much time researching local STR regulations and permit requirements as the property itself since those can change the economics quickly. If you're treating it as an appreciation play, I'd also compare projected long-term rental performance as a backup plan.

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  • Twana RasoulBusiness Member
    Real Estate Agent · San Diego, CA · Member since 2017 · 1k+ posts · 1k+ votes
    3mo

    @Deron Amador Hi Deron, I have clients that have purchased STRs in Carlsbad Village, Cardiff, Solana Beach, Point Loma and Pacific Beach for both income and Tax savings through cost segregation.  Happy to discuss, feel free to shoot me a private message.  I'm a local investor as well as an agent.

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  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    3mo

    Hi and welcome to the BP community, I definitely think San Diego can still be worth it, especially if you're looking at it as more of an appreciation play. If cash flow isn't a necessity, the tax benefits of a qualifying short-term rental can be substantial. A cost segregation study paired with bonus depreciation can create significant upfront tax deductions, assuming you meet the participation requirements. Do your due diligence and do some research on the local laws and regulations as they can vary city to city. Also worth speaking to a CPA who specializes in real-estate so they can walk you through some numbers before making any investments.

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  • Dari AhranjaniPro Member
    Real Estate Agent · San Diego, CA · Member since 2020 · 1 post · 0 votes
    2mo

    Hi @Deron Amador, I manage a couple of coastal STRs, and the truth is that even as a short-term rental, it can be very difficult to make the numbers work after management fees, cleaning costs, maintenance, utilities, and all the other little expenses that add up.

    I usually tell people to at least consider self-managing. It can be annoying at times, but it’s honestly not all that difficult once you have good systems in place. Being out of the area would definitely make that more challenging, though.

    If you're looking for something coastal you can operate as an STR now and potentially move into later, I still think it can be a good option. That's actually something I look for myself as well.

    Some of the best STR opportunities I see aren't necessarily the ultra-expensive properties directly along the coast. Based on purchase price compared to potential income, some of the better opportunities can be a little farther inland not directly in the coastal cities, but still within a short drive of the beach and other San Diego attractions.

    I would also strongly recommend looking for something with more than two bedrooms. Once you get into the three-bedroom range, some of the competition drops off, and you can appeal to larger families and groups.

    Lastly, I would still approach the purchase with a normal investment mindset. I'd look for something where you can add value immediately, improve the layout, or potentially add an ADU in the future. That way, you have multiple exit strategies

    760-505-2340
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  • Ben McMahonPro Member
    Investor · San Diego CA · Member since 2014 · 341 posts · 139 votes
    2mo

    I actually am closing next week on a property that technically is San Diego unincorporated but located in San Marcos. Wondering about STR as well. The property I am buying id like to start as STR and move into event space since it's located on 28 acres in North County SD and has a spectacular location on the top of a hill. Would love to talk to someone that can also recommend a cohost who could do a good job without taking all the money. This will be a very high end property post renovation

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