San Diego, renowned for its iconic beaches and world-class seaside attractions, is a lovely beach city, but it has much more to add to its appeal. With a lot of culture, history, natural splendors, and opportunities for entertainment and education, there are lots of reasons to move to San Diego that have nothing to do with the sand and surf.
If you’re thinking about investing in San Diego real estate, you have a lot of options. The beach neighborhoods can be tempting, but don’t be afraid to think outside of that sandbox. There’s actually a bustling, diverse housing market throughout San Diego’s extensive geography, and this coastal city holds unlimited potential for real estate investors looking to invest in various types of properties.
At Chase Pacific, we work with a lot of new and experienced investors who are interested in San Diego’s potential. Here, you’ll find high rents, rising home values, and a strong pool of tenants. The local economy is strong and growing. People are coming to San Diego for work, school, or just because they know it’s a remarkable place to live.
As an investor, whether you’re local to the city or buying from outside of it, you likely know there is a long list of great reasons to put your money into property here. We can work with you to identify the right opportunities and to evaluate how certain neighborhoods and property types will align with your investment goals.
Let’s get started by exploring the importance of location in real estate, the critical factors to look for in a suitable investment location, a brief overview of how San Diego’s housing scene differs from typical beach communities, and the advantages of partnering with a real estate expert to find hidden opportunities.
We’re going beyond the beaches today, and we’re showing you some hidden gems in our local real estate market.
Understanding San Diego’s Dynamic Housing Market
San Diego’s real estate scene serves a melting pot of cultures and housing preferences. From vibrant downtown apartments to quiet suburban homes, there’s a perfect fit for any investor and for any tenant who is hoping to rent a home from you. This diversity stems from the city’s favorable climate, excellent education and research institutions, and military bases, attracting a diverse range of residents in various life stages.
While the beaches have always been attractive, the downtown area is becoming more attractive to a lot of investors and renters. Several surrounding neighborhoods are also becoming more populated and seeing higher demand, and we’re going to take a closer look at some of those to help you decide where to look.
One of the main factors driving the success of this market is the limited supply of homes and condos, which has led to a rise in housing prices. The city’s picturesque coastal location and mild climate also add to its appeal. The proximity to the tech and aerospace industries, as well as an array of employment opportunities in tourism, education, and healthcare, also ensure a consistent demand among buyers. Demand is high, and the current inventory is tight. This allows you, as an investor, to succeed because when you have a well-maintained and attractive property to offer the right tenants in the right neighborhood, you’ll have no trouble bringing in high rents and signing leases with qualified tenants.
According to the San Diego Association of Realtors, the average price of a home in San Diego has been rising by at least 7.2% YoY since 2021. Another trend in the market impacting demand is the number of millennials and Generation Z tenants seeking a more affordable and enjoyable lifestyle. The trend has caused an increase in demand for homes in eastern San Diego County, which offers lower prices than the coastal areas of the city.
Real estate investors looking for a stable income stream should look at investing in multi-unit rental properties throughout San Diego. This section of the market continues to grow as the city’s population increases. Investing in multi-unit rental properties ensures a stable rental income and a lower vacancy risk.
It’s impossible to talk about real estate investing these days without considering the pact of short-term vacation rentals. If your investment goals include these types of properties, you’ll be successful. San Diego is a hotspot for tourism, and investing in a vacation rental property allows some advantages such as high rental yields and the added benefit of being able to use the property while generating rental income.
Let’s Talk About Location
Location is the cornerstone of real estate investment. You don’t have to be an experienced investor to understand this.
Acquiring a property in a prime spot can determine its value, appreciation, and potential for generating income. When considering locations, the most critical factors include proximity to schools, shops, entertainment, and recreational facilities. A well-connected transport system can be just as vital for ease of access to other districts.
Here’s what matters most to San Diego tenants, which means these things must matter most to San Diego investors:
- Neighborhood and a Sense of Community
The neighborhood in which a property is located is one of the most crucial factors to consider as an investor. A good neighborhood and a strong sense of community can make a big difference in terms of property value and rental income. San Diego is home to several excellent neighborhoods that draw a lot of tenants. These popular neighborhoods have in-demand amenities, such as good schools, shopping centers, and entertainment.
- Proximity to Attractions
San Diego is a city filled with attractions. There is the beach, and there are also parks, museums, and entertainment venues. As such, when choosing a place to invest, it is vital to consider its proximity to these attractions. Properties located close to these attractions are typically more in-demand and can command higher rental prices.
- Traffic and Public Transport
No tenant wants to fight for parking in their own neighborhood. They don’t want to be stuck in an hour of traffic in order to travel two miles. Investing in a property close to public transport and easy roads is essential, particularly in a busy city like San Diego. It is worth considering the convenience of transport for tenants who do not have cars or those who prefer not to drive. Properties located near public transport hubs, such as train stations, bus terminals or trolley stops, are typically more in-demand.
The location of a property can help to determine the value of that property. San Diego has several high-value neighborhoods and suburbs, and you’ll have to think about investment metrics that inform your goals, such as rental values, cash flow, and long-term appreciation. Properties located in San Diego’s best neighborhoods typically come with a premium price, but the rental income is usually much higher. Therefore, when choosing a San Diego investment property, consider the location to ensure it has the potential for strong capital growth.
Discovering San Diego’s Hidden Gems: Beyond the Beaches
There’s an understandable fascination with beachside properties. They come with high price tags, however, and a lot of risk – especially as weather seems to be getting more and more unpredictable.
We love a beach as much as you probably do. However, San Diego has thriving submarkets that savvy investors should consider, and they don’t necessarily have ocean views. These lesser-known neighborhoods offer unique qualities and investment prospects difficult to locate in a beach community.
- North Park and South Park: The Hipster Havens
Both North Park and South Park are considered two of San Diego’s trendiest neighborhoods. Known for their eclectic mix of restaurants, bars, and dynamic art scenes, these areas attract a wide demographic of creatives looking for a vibrant, walkable community. Residents can enjoy easy access to Balboa Park, which offers endless recreational opportunities.
- La Mesa: The Friendly Village
Just a short drive from downtown San Diego, La Mesa offers a small-town atmosphere while providing easy access to urban amenities. With a revitalized downtown, numerous parks, and a reputable school district, this family-friendly area is perfect for investors in single-family homes. You’ll attract tenants who are looking for space, privacy, and a quieter environment.
- Chula Vista: The Growing Economic Hub
Chula Vista, the second-largest city in San Diego County, is experiencing a surge in economic growth. With prestigious tech companies and innovative housing projects in the pipeline, the potential for real estate growth is immense. Furthermore, its proximity to the international border makes it an essential hub for business and cultural exchanges.
- Kensington: The Historic Jewel of San Diego
Located just east of North Park, Kensington showcases an abundant history and charm. Lined with art deco buildings, this tranquil residential community boasts a strong sense of community, low crime rates, and high-ranking schools. Investors looking for an upscale, safe neighborhood would do well to consider Kensington.
Partnering with a Real Estate Expert: Unlocking Opportunities
Real estate investing can be a complex endeavor, and partnering with a trusted real estate expert can guide the way. An experienced real estate professional can help buyers and investors spot emerging trends and identify markets with high growth prospects. While abundant information is available online, a real estate expert will provide valuable insights that aren’t often found through a simple search.
As you’re researching neighborhoods or considering your next (or maybe your first!) investment in San Diego, leverage our knowledge and resources. Contact us at Chase Pacific Property Management & Real Estate Services, and we’ll help you discover a hidden gem of your own.