The vacation rental industry in the San Diego area has grown exponentially in the past couple of years and it continues to pick up steam. In 2017, there were 17.6 million overnight visitors who stayed in San Diego, with almost 40% of them choosing to private homes over hotels.
Home to some of the most incredible beaches in Southern California, numerous universities, and a convention center that holds dozens of annual events (there were over 60 events in 2017 alone), San Diego has only grown in popularity as a top destination for travelers. And with pleasant weather throughout the year, the low season for tourism in San Diego is a practically non-existent.
We wanted to take a look at how all of the travel to this area has helped to make the vacation rental industry so successful, so we analyzed thousands of listings and compiled our Vacation Rental Performance Report for San Diego, Oceanside, Carlsbad, Solana Beach and Del Mar. If you’re a vacation homeowner or a prospective buyer, this report will show you the rental income, nightly rates, and occupancy rates you can expect from a vacation rental in these incredible beach towns.
Some of the key factors we’ve identified that are contributing to the area’s success are:
- Huge traveler demand for vacation rentals
- Growing tourism industry
- Temperate year-round climate
PROPERTY SIZE DOESN’T DETERMINE VACATION RENTAL SUCCESS
Both small and large accommodations are in high-demand in San Diego, Oceanside, Carlsbad, Solana Beach, and Del Mar.
Smaller condos that are farther from the beach tend to be less expensive for investors because of their size and location – and they offer affordable vacation rentals for guests. Zillow reports that the median price of a one-bedroom property in the San Diego metro is $349,000.
Our report shows that 49% of vacation rentals in the San Diego area are either studios or one-bedroom homes and have occupancy rates around 65%. Even with such high demand, you need to be strategic with your calendar, your marketing, and your rates in order to cover the higher investment costs in these areas.
Larger beachfront homes are at the top of the real estate market in terms of costs, but they also command a high nightly rate that affluent travelers and large groups are willing to pay. Zillow reports that homes with five or more bedrooms have a median price of $1.35 million.
While four- and five-bedroom homes only make up 7% of the vacation rental inventory, they are rented out almost 60% of the year and command much higher nightly rates.
Property prices in San Diego and neighboring cities can be high, but there’s huge opportunity for owners and investors to earn rental income with a competitive marketing strategy.
HOW MUCH OWNERS ARE EARNING FROM SAN DIEGO AREA RENTALS
According to our report, one-bedrooms in the 50th percentile typically earn a yearly revenue of $18,780, while one-bedrooms in the 75th percentile can expect almost $29,000 in annual rental income.
We also found that five-bedroom homes in the 50th percentile can make up to $73,000 per year, and those in the 75th percentile make almost $147,500.
The difference between a property performing in the median and one performing in the 75th percentile goes beyond the location and condition of the rental. It also requires a level of professionalism and a solid marketing strategy.
PROFESSIONALISM IS KEY TO STANDING OUT
There’s immense potential to collect a competitive rental income and even turn a profit in this market – if professionalism is at the foundation of your vacation rental strategy.
Vacation rental homes in the San Diego area are not only up against each other, but they must also compete with hotels.
To succeed in this competitive market, you need a professional listing that includes high-quality images and well-written descriptions. You must respond quickly to guest inquiries and be willing go the extra mile to improve the experience of all of your travelers.
To stand out even more in the San Diego area, consider adding one of the specific amenities that travelers look for when booking:
- Proximity to the beach
- Access to a pool
- Outdoor spaces with seating (patios, rooftop decks, yards)
- Grills and outdoor cooking equipment
Any amenities that make it easy for guests to enjoy the amazing San Diego weather can help you stand apart from the competition and command a higher nightly rate than your neighbors.
DOWNLOAD OUR FULL REPORT FOR ADDITIONAL DETAILS
With growing tourism, a nonexistent low season, and a large need for more vacation rentals, San Diego, Oceanside, Carlsbad, Solana Beach or Del Mar could be the perfect place for your vacation rental.
Are you thinking about buying a vacation rental in this area? Already own a second home in the San Diego area and want to outperform the competition?
Download our free 2018 Vacation Rental Performance Report for San Diego, Oceanside, Carlsbad, Solana Beach and Del Mar to find out about:
- Rental income potential by property size
- Average occupancy by property size
- Average daily rate by property size
- Average days booked in advance
- Average length of stay
- Vacation rental inventory by property size
- Occupancy rate by month
The San Diego Area
Vacation Rental Performance Report
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