New Opportunities for Renters and Property Investors
We thought we’d look outward in a series of new posts on new condominium development projects that are filling the need for more housing, as well as creating new rental investment income properties. We’ll get around to covering many of the best cities for property investment.
While any project in San Diego, California will get buyers, it’s the mid to higher end that opens up more investment opportunities and for earning more rental income.
San Diego: A Rental Housing Market in Crisis
Beautiful San Diego is the dream of many Americans, yet very high apartment prices and low availability make the idea of living there impossible. The housing market is San Diego is much like the rental housing markets in other California cities, yet there hasn’t been much building in SD since before the last recession.
A number of reasons for this are outlined below. Yet despite challenging issues, developers are on course to bring in much more condominium and apartment rental supply into the San Diego rental market.
Big money has a way of paving the path for amazing new condo developments which are often only built during boom times. The last time San Diego saw large condominiums built was back before the last recession in 2008.
This time around, builders will need to build more than 7,000 multifamily (apartments and condos) units every year from 2008 to 2020 to keep pace with demand.
San Diegans Hungry for Condos and Apartments
Southern Californians are on the hunt for apartment rentals, and even moreso in San Diego where housing availability has been severely constrained to the tune of 3.7% vacancy.
A recent report in the San Diego Tribune suggests more than 2000 new rental apartments will be introduced, mostly in downtown San Diego. As occupants leave their units to live in the new developments, they will leave their old homes to property investors and renters.
The draw of these pricey new luxury apartments is bolstered by the amenities. And it’s amenities that can result in San Diego homeowners (babyboomers) finally putting their homes up for sale. Lifestyle and comfort features that buyers are willing pay for. The downtown locations mean convenience, excellent quality of life north of downtown or on the waterfront.
The average rent in San Diego County is expected to increase from $1,927 per month now to $2,048 in 2019 — Times of San Diego
Rents rose 2.4% last year and are expected to rise another 2.9% in 2018. The lack of available housing in San Diego has lead to outrageous commutes for some workers. Add that to an average rent of $2,546 per month downtown – up 4.3% from last year and you have an unbearable situation.
Rentcafe found the average San Diego apartment rents are about $2028, up 3% from last year. The increases for studio and 1 bedroom apartments was 5%. As the national rental housing report showed, prices are up in most markets.
The San Diego neighborhoods of Mission Valley East, University City, Core – Columbia, Cortez, EAst Village, Gaslmap, Harborview, and Horton Plaza have the highest rents.
There are a few people suggesting Airbnb short term rentals are taking a lot of rental housing off the market. The true cause of the housing crisis may be an arduous development approval process, the inclusionary housing fee, and anti-development group opposition. The result is no developments amidst an economy that has seen strong job growth.
There are no rent controls in San Diego however, there are other measures to help keep housing affordable, such as the affordable unit inclusionary rule.
The vacation rental market in San Diego is similarly constrained, which might explain a growth of Airbnb listings.
Canadian Developers to the Rescue
Fortunately, condominium developers, many of them Canadian companies, are hoping to satiate some of the appetite for condo purchase and rentals with these beautiful new condominiums :
The Park on Bankers Hill, a 14-story, residential mixed-use project at 2850 Sixth Ave.
Pacific Gate, is a preconstruction, mixed-used residential project, with 215 two- and three-bedroom units for sale in a 41-story tower.
41 West luxury, is a 41-unit condominium project at 2900 Sixth Ave. in the Bankers Hill near Balboa Park and San Diego Zoo.
800 Broadway project from Minto Investment Group, LLC, proposes a 40-story, mixed-use development with 384 dwelling units, approximately 21,000 square feet of retail space, and 358 parking spaces.
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See also: Property Management Software | Apartments for Rent | Renters Insurance | 2018 Rental Housing Market | Apartment Rent Price Trends | Best Cities to Buy Rental Property | Texas Rental Housing Market| Reduce Tenant Turnover | Property Management Software | How to Screen Tenants | Raise Rent for Property Managers | How to Increase Property Cash Flow | Property Management Business | Tax Savings for Property Managers | Real Estate Portfolio Tips | Starting a Property Management Business | How to Use Property Software | ManageCasa Cloud Based Property Software | Income Property Management Expo