How to Buy a Short-Term Rental Property in San Diego: What Every Investor Needs to Know

I’ll be honest with you. When I started building The Carmine Collection — my boutique short-term rental portfolio here in San Diego — I didn’t have a playbook. I had a conviction that this city was one of the most compelling STR markets in the country, and I had the willingness to test that conviction with my own money. What I found confirmed everything. San Diego’s year-round climate, world-class coastline, and relentless demand from travellers creates an environment where a well-positioned STR property doesn’t just perform — it outperforms. This guide is everything I’ve learned, distilled for investors who are serious about getting into the San Diego STR market and doing it right.

Why San Diego Remains One of America’s Strongest STR Markets

San Diego is not a seasonal market. That distinction alone makes it fundamentally different from almost every other STR market in the United States. While Airbnb investors in mountain towns or ski resorts are managing dramatic peaks and valleys in occupancy, San Diego operators enjoy demand that stays elevated twelve months of the year. The average temperature rarely drops below 55 degrees Fahrenheit. The beaches, the trails, the food scene, the Navy and military visitor traffic, the convention calendar at the San Diego Convention Center — all of it combines to create a demand profile that most STR markets can only dream of.

In 2026, the fundamentals remain strong. Housing supply is constrained across the county, which keeps property values stable and limits the inventory available for STR conversion. Meanwhile, average daily rates for well-positioned coastal properties continue to trend upward as traveller expectations for design and amenity quality rise. The traveller coming to San Diego today is more sophisticated than they were five years ago. They want a property that feels intentional — a place that reflects the city’s culture rather than just providing a bed. That shift in traveller expectation is actually an opportunity for investors who understand design.

The Best San Diego Neighborhoods for Short-Term Rental
Investment

Mission Beach

The undisputed epicentre of San Diego STR demand. Mission Beach sits between the Pacific Ocean and Mission Bay, giving guests access to two completely different bodies of water. Nightly rates here are among the highest in the county, and occupancy rarely dips. Entry price points for properties with STR potential typically start around $1.2M and climb steeply from there. Competition is high but so is the reward for a well- presented property.

Pacific Beach

Pacific Beach, or PB as locals call it, offers slightly more accessible entry points than Mission Beach while still delivering strong coastal demand. The neighbourhood has a younger, more social energy and attracts a different traveller profile — groups, bachelorette weekends, surf trips. Properties with rooftop decks or outdoor entertaining space consistently outperform here. Budget $900k to $1.5M for a viable STR entry point.

Point Loma

Point Loma is where I chose to base my own portfolio and my real estate team, and for good reason. It offers a sophistication and authenticity that Mission Beach and PB cannot replicate. Guests who book in Point Loma tend to be older, higher-spending, and
looking for an experience rather than a party. The lighthouse, the harbour views, the Liberty Station dining precinct, and the proximity to downtown make it a compelling proposition for the design-forward STR operator. It is also slightly undervalued relative to its actual demand profile, which makes it one of the better opportunities in the county right now.

La Jolla

La Jolla is San Diego’s luxury address. Properties here attract high-net-worth travellers, corporate guests, and international visitors. Nightly rates at the top end of the market can be extraordinary, but entry price points reflect that premium — expect to invest $2M or more for a property with serious STR potential. The La Jolla Cove area and the Village are the highest-demand sub-locations within the neighborhood.

Ocean Beach

Ocean Beach has a character that no other San Diego neighbourhood can replicate. It is bohemian, local, and stubbornly authentic. The STR opportunity here is for investors who understand how to position a property to match the neighbourhood’s personality. Guests who choose OB are choosing it deliberately. Properties that lean into the neighbourhood’s surf culture and eclectic aesthetic consistently outperform those that try to impose a generic luxury aesthetic.

Coronado

Coronado is in a category of its own. The island location, the Hotel del Coronado, the pristine beach, and the tight housing supply create a market where demand consistently exceeds inventory. STR properties here attract premium guests and command some of the highest nightly rates in the county. The trade-off is access — crossing the bridge or taking the ferry limits appeal for some traveller types, but enhances it for others who are specifically seeking that island feeling.

What Makes a Great STR Property in San Diego
The single most important metric in short-term rental investing is sleeping capacity. Revenue is a function of nightly rate multiplied by occupancy, and nightly rate is largely determined by how many guests the property can comfortably accommodate. A four- bedroom property with two sofa beds has a fundamentally different revenue ceiling than a two-bedroom with no flex sleeping. When I evaluate a potential STR property, the first question I ask is: how many people can this comfortably sleep, and can I expand that capacity with the right design decisions?

The second factor is design and presentation. This is where I see the largest gap between average STR operators and exceptional ones.

The Carmine Collection properties — Casa Coolangatta, Casa Kirra, and The Jade Manor — were each designed with a specific aesthetic identity in mind. Not decorated. Designed. That distinction drives reviews, drives repeat bookings, and drives the kind of word-of-mouth
that fills a calendar without paid advertising. Guests today are sharing their accommodation experiences on social media. A property that photographs beautifully generates its own marketing.

Beyond sleeping capacity and design, the practical attributes that move the needle are: outdoor entertaining space, dedicated parking, proximity to the coast, and kitchen quality for longer stays. Properties that check all of these consistently outperform the market.

How Smart Investors Use Cost Segregation and Accelerated Depreciation on STR Properties

One of the most underutilised strategies in short-term rental investing is the tax treatment available to active STR operators. Unlike traditional rental properties, short- term rentals held by active investors can qualify for accelerated depreciation benefits that significantly reduce tax liability — sometimes in the very first year of ownership. A cost segregation study breaks down the components of a property into different depreciation categories. Rather than depreciating the entire structure over 27.5 years, a cost segregation study identifies components — flooring, fixtures, appliances, landscaping, certain structural elements — that can be depreciated over 5, 7, or 15
years instead. When combined with bonus depreciation provisions, this can result in a substantial paper loss in year one that offsets other income. For high-net-worth investors with significant income from other sources, this is one of the most powerful legitimate tax reduction strategies available. I have used it across The Carmine Collection properties, and it is a core part of the conversation I have with every STR investor client. Always work with a qualified CPA who specialises in real estate investment to determine what applies to your specific situation.

Why You Need an STR Advisor Who Actually Owns What They Sell

There are a lot of real estate agents in San Diego who will happily advise you on buying an STR property. Most of them have never owned one. They will tell you what the numbers look like on paper, show you Airbnb revenue projections, and leave you to figure out the rest. That is not the experience I offer. I own and operate The Carmine Collection — Casa Coolangatta, Casa Kirra, The Jade Manor, and a boutique hotel conversion currently in progress. Casa Kirra has been featured in Condé Nast two years running. The Carmine Collection is listed on Plum Guide, which accepts fewer than 3% of properties that apply. When I sit down with an STR investor client, I am drawing from direct, ongoing operational experience. I know what a cost segregation study looks like in practice. I know what design decisions move the needle on nightly rates. I know what guests are looking for because I read my own reviews every week. That is the difference between an advisor who knows the theory and one who lives the reality.

Ready to Invest in San Diego’s STR Market?

If you are serious about STR investing in San Diego, I would love to show you what I have built and how I can help you build yours. Whether you are looking for your first investment property or expanding an existing portfolio, the conversation starts with understanding your goals and finding the right asset to meet them.

Visit thecarminecollection.com to see the standard we build to.
Visit aussiejosh.com to get in touch directly.