San Diego is one of California’s most sought-after destinations, combining year-round sunshine, a strong tourism economy, and a high quality of life. For property investors — especially those based in the UK and abroad — short term rentals in San Diego present a compelling opportunity to generate strong rental yields in a desirable, high-demand market.
This guide provides insight into San Diego’s short term rental landscape, including key investment areas, regulatory frameworks, and how Fraser Bond helps global investors navigate the market with confidence.
San Diego attracts millions of annual visitors for its beaches, theme parks, naval bases, and vibrant city life. The city’s steady flow of domestic and international tourists — along with business and academic travellers — fuels demand for short term accommodation.
Investor advantages include:
High occupancy rates year-round
Strong per-night rental income, especially during summer and events like Comic-Con and sports seasons
Tax benefits through U.S.-based LLC structuring
Diversified tenant base: leisure travellers, corporate guests, and military families
For UK investors, San Diego provides both lifestyle appeal and a stable long-term asset base in one of California’s most resilient real estate markets.
When investing in San Diego short term rentals, location is key. Here are the most lucrative and in-demand neighbourhoods:
These coastal communities are favourites among tourists, offering oceanfront access and high nightly rates. Properties here often book solidly throughout the year.
Perfect for business travellers and urban tourists. High footfall, proximity to the convention center, and year-round events make this area highly profitable.
An upscale coastal enclave, ideal for luxury short term stays. Properties here attract families, corporate guests, and high-income tourists.
Trendy, vibrant, and walkable, these areas appeal to younger travellers, festival-goers, and those seeking a local experience.
In 2022, the City of San Diego implemented new rules under its Short-Term Residential Occupancy (STRO) Ordinance, aimed at balancing housing availability with tourism needs.
Key requirements include:
License Categories:
Part-Time STRO License: For renting a property fewer than 20 days per year.
Home Sharing License: For hosts renting a room while residing on-site.
Whole-Home (Tier 3) License: Allows up to 182 days/year of whole-home short term rental.
Mission Beach (Tier 4): Separate rules allow year-round STR with specific licenses in this high-demand area.
Application Limits: Only a certain number of Tier 3 and Tier 4 licenses are issued, creating a cap on supply and increasing value for licensed properties.
Good Neighbor Policy Compliance: All short term rental properties must meet local noise, trash, and guest behaviour standards.
Investors must secure the appropriate license before listing on Airbnb, Vrbo, or other platforms — making compliance a critical success factor.
While the regulatory landscape requires due diligence, San Diego remains an attractive market for foreign investors with the right strategy:
Acquire already-licensed properties or those in zones that allow STRO licensing
Work with local property managers who handle licensing, bookings, and compliance
Explore mid-term rentals in areas where whole-home licensing is capped
Structure ownership via a U.S.-registered LLC for legal protection and tax efficiency
Fraser Bond specialises in supporting UK-based and international investors exploring short term rental properties in high-demand U.S. cities like San Diego. Our services include:
Identifying compliant and high-yield investment properties
Facilitating cross-border purchases and entity structuring through vetted legal partners
Connecting clients to licensed local agents and STR property managers
Navigating licensing and regulation in the San Diego short term rental market
Providing ongoing asset oversight for compliance, performance, and guest satisfaction
With Fraser Bond, you gain more than a real estate agent — you gain a strategic partner with deep cross-market expertise.
San Diego’s short term rental market offers excellent investment potential — particularly in beachfront and urban locations. While regulation has tightened, it has also created a premium environment for compliant operators, offering strong returns and limited competition.
With Fraser Bond’s strategic guidance, UK and global investors can confidently access San Diego’s coastal rental economy, ensuring compliance, performance, and long-term value.
