Renting out a vacation home in San Diego can be lucrative and busy. This is a popular town for visitors from all over the world, and a lot of travelers prefer the privacy and ease of a residential rental property rather than a hotel.
Your nightly rental rate is typically higher when you’re renting out a vacation property, but there’s a lot of work involved when you rent to short term guests. You have constant turnover, and that means frequent cleaning, maintenance, and preparation for new guests. It’s a hustle to keep your property occupied, and you may face long vacancy periods, especially during the off-season.
As San Diego property managers, we frequently work with vacation rental property owners to convert their properties to long term rentals. There’s more stability and ultimately higher ROI when you effectively lease a long term rental home to residents.
Here’s why you should consider changing your own property to a long term rental, and how we can help.
Fewer Fees and Permits with Long Term San Diego Rentals
Long term rentals come with less bureaucracy and fewer hoops for owners to jump through. Your vacation rental requires that you hold a Transient Occupancy Tax Certificate. There are additional taxes to pay on all the income you receive, and you’re also required to obtain a Short Term Rental (STR) license or permit.
When you’re a landlord or investor who is renting out a property for the long term (generally 12 months or more), there are fewer taxes and fees, and a lot less regulation. You’re contributing to the local housing community, and for that you can expect an easier process.
Consistent Rental Income
Whether it’s a home you once lived in yourself or a property you invested in specifically to earn income, the consistent rental income you receive with a long term rental will contribute to higher returns overall. You won’t be chasing every new booking, and you’ll be able to budget and plan a year or more in advance because you will know exactly how much money is coming in every month.
Rents for San Diego rental homes are high right now. We’re enjoying a strong market where there’s a high demand for well-maintained homes in desirable locations. Our tenants are well-qualified, and willing to pay the higher prices that the market demands. Whether you’re renting out a studio apartment or a large single-family home, you’ll earn a comfortable rental income. It will be recurring every month for the entire term of your lease.
This stability means you have reserves to draw upon when there’s an expensive repair to make. When you establish a great tenant relationship with your long term residents, you’ll relax knowing that you have a partner who will pay rent on time and help you take care of the property. That’s not the type of peace of mind you get with short term rentals.
Marketing Does Not Have to be Constant
With a long term rental property in San Diego, you do not have to be marketing, selling, and advertising all the time. During periods of vacancy and turnovers, you’ll need to be strategic about how you market your home and what type of tenants you’re aiming to reach.
It’s not as intense as when you’re marketing for tenants for your vacation rental.
Your vacation rental does not make any money unless it’s consistently occupied. A vacancy period of a full month or several weeks will crush what you earn. There’s an ongoing need to sell your property to potential guests and lock in their reservations.
This type of high-intensity marketing costs money and takes a lot of time.
A year-long lease will only require serious marketing once a year. If you retain your tenants – even better. You won’t have to market your property again until they’re ready to leave.
Maintaining Your Investment Property
Short term guests who are on vacation have a different relationship with your property than long term tenants. They don’t think of it as their home, so they don’t care about it as much.
When a tenant signs a year-long lease, they are committing to caring for the property. They’ll help you maintain it, they’ll report needed repairs right away, and in some cases they’ll play a role in landscaping and preventative maintenance.
Vacationers are looking for a home away from home, but they’re not thinking long term. They’re coming and going, and the wear and tear on your property will be higher. There’s far more deterioration on a home that’s used as a vacation rental.
Forget the Furnishings
All vacation rentals need to be furnished. That’s a huge expense for owners. You need to maintain those furnishings and make sure the linens are super-clean and comfortable. You need to provide beds, tables, kitchen utensils, toasters, coffee makers, Wi-Fi, and cable.
When a chair breaks or wine glasses shatter, they need to be replaced at your expense. That’s a lot to keep up with.
Long term tenants do not require furnished homes. In fact, they prefer to move in with their own furniture and décor. You won’t be expected to provide towels and tea cups.
San Diego Property Management: Our Role
You can manage the vacation rental property you own by yourself, if you’re willing to invest the time and resources. Renting out your vacation home through an agent or a professional property manager is a better idea, however, especially if you don’t want to manage the cleaners and the landscapers and the inspections between each guest.
It’s expensive. Short term vacation rentals are extremely labor intensive, so you’ll either have to do that work yourself or pay a property manager to do it.
Long term property management relationships are different. The management fees are less, and you’ll have the opportunity to partner with your management company to ensure your rental home is performing as you expect. You can set short and long term goals and talk about improvements to increase rental value, tenant trends, and what the market is doing. It’s a relationship driven by shared values, and you can leverage your property manager’s expertise to have a better and more profitable investment experience.
Vacation rentals can be lucrative. But, to make some real money and have an investment experience that’s stable and profitable, consider converting to a long term rental. We can show you some real numbers and help with the transition. Please contact us at North County Property Group.