The Local Investors' Guide to San Diego Real Estate

If you’re keen to hold property in a city with super strong demand for rentals, San Diego is a great choice. With miles of picturesque coastline, sunny climate and a healthy economy, it’s a desirable place for residents and single-family homes can attract strong returns. While it’s not the cheapest place to buy real estate, it can be better value than many parts of California and the State’s rent control provisions are more favorable toward homeowners in San Diego than Los Angeles. 

For a long-time, real estate investors in the San Diego area have concentrated heavily on the short-term rental market. So much so, that the County has introduced new caps to make more homes available to long-term renters. 

Whether you’re now considering the long-term rental market or are considering purchasing an investment property in San Diego, this guide brings together some handy resources to help you get the most out of your home. 

Is it better to have a long-term rental or short-term vacation home in San Diego? 

There are pros and cons to leasing your home as a long-term or short-term rental property, but in San Diego, the decision is not always as simple as choosing between the two. San Diego City Council has recently approved a short-term rental ordinance, a move that caps the number of short-term rentals at 1% of the city’s total 540,00 housing units. The move is expected to reduce vacation rentals by up to 48%. 

If you’ve done the math and think that short-term vacation rental is a good option for your home, you can apply for a short-term rental license (STRO). This will enter your home into the lottery to operate as a short-term rental within the local cap. 

Before you apply (or if you aren’t selected), it’s well worth considering renting your home long-term on a lease agreement. San Diego homeowners can benefit from a steady income for 12 months and be eligible for generous tax benefits that don’t apply to short-term rentals or homes used part-time by friends and family. You’ll also have significantly less turnover and reduce the cost of wear and tear on your property from having the same residents in place for a year or more. 

Read More: San Diego Introduces New Rules and Caps For Short-Term Rentals

How much property tax will I pay in San Diego?

The average property tax rate for California is 0.76% (accurate as of August 2022). This means San Diego falls into one of the 29 states with a property tax rate below 1%.  

The San Diego County Treasurer-Tax Collector’s Office collects property taxes from San Diego homeowners. 

For homes that operate as a short-term rental, an additional Transient Occupancy Tax (TOT) applies for homes whenever you have guests that stay for 30 days or less. The Transient Occupancy Tax is currently 8% of the rent collected and should be paid by your guest when paying for their stay at your home. TOT must be reported and paid to San Diego county. You can learn more about TOT and reporting here. 

How much rent should I charge in San Diego?

San Diego ranks as one of the best places to raise a family, making it a popular rental market for single-family homes. So if you own a home in “America’s Finest City”, how should you expect to price your San Diego rental property? 

News reports have been varying wildly, with some saying that rents for single-family homes are still on the rise in San Diego and others saying they have begun to cool. In order to optimize your rental income, do you keep rents high or create fairer pricing to attract reliable residents that want to stay long-term? 

The best way to stay in step with the market is to price your San Diego home right from the start. When helping owners price homes in San Diego’s rental market, Belong uses technology to blend live market data with an all-important metric: real-time demand for each home. We determine the right price for your home that will maximize rental income and keep vacancies low, long-term. To find the sweet spot for pricing your San Diego rental home, check out this article. 

Read More: Forget the News: This is How You Should Price San Diego Rental Homes

Who are the best property management companies in San Diego?

The best way to ensure your new investment home is well-kept and profitable is to find the best company to help you manage it. But when comparing the best property management companies across California, you’ll be looking at a handful of differences between them all. Things like how much they charge for management fees and how often you’re going to get slogged for more (if they even tell you!). 

With Belong, there’s no comparison. Because Belong isn’t a property management company, it’s a completely unique experience that is humanizing the rental market. 

Belong's smarter, future-ready services include:

1. Guaranteed Rent: Receive your rent on time, every month, regardless of when it’s paid by residents
   
   
2. 24/7 Concierge Support: Both homeowners and residents have access to real-time support, going beyond emergency maintenance requests.
   
   
3. Transparent fees: No hidden costs like setup fees or lease renewal charges
   
   
4. Modern-day marketing: Virtual tours and video marketing is included in listings
   
   
5. User-friendly app: Belong's app provides convenient access to documentation, cash flow insights, and financial and insurance solutions. 
   
   
6. Long-term residents: Belong takes a personalized approach to match the right people, so they stay longer and feel at home
   
   
7. Innovative financial solutions: Homeowners can manage cash flow effectively, even splitting the cost of maintenance and placement fees.
   
   
8. Eviction protection: Owners are shielded from legal costs if we ever place the wrong people
   
   
9. Extensive vendor network: Belong connects homeowners with a vetted network of over 10,000 professionals for repairs and renovations.
   
   
10. Comprehensive insurance solutions: Belong offers insurance options that protect homeowners, their properties, and residents.
    
    
11. Market-driven insights: Belong utilizes market data and real-time interest to maximize the value of your home.
    
    

Even though Belong topped the list when we compared Calirfornia’s top-ranked property managers, it became clear we were comparing apples with oranges. Find out if your San Diego property is eligible for Belong here. 

Read More: We Outrank The Best Property Management Companies in California

Discover why San Diego loves Belong

From the beautiful Balboa Park and the vibrant downtown to the world renowned Zoo and the amazing restaurants, San Diego is a great place for families to call home. Belong will go out of its way to find great long-term residents that will love your San Diego home as much as you do. But don’t take our word for it, here is what homeowners are saying about us…

Think your San Diego home belongs with us? Find out if you qualify here.