San Diego rental property investing

[Coleman Cox]

Hi All,

I recently moved back to San Diego after about 10 years in the Bay Area of California; happy to be home! I was born and raised in Point Loma so am familiar with San Diego, but am trying to get up to speed on the current investing environment.

What are the areas that make the most sense for cash flow investing? Has anyone been able to make a house-hack strategy work in San Diego? What was the approach and what areas do the numbers tend to pencil? Would love to hear any insights and connect with other investors in the area. Thanks!

[Dan H.]

Originally posted by @Aaron K.:

San Diego doesn't really cash flow for the most part, so if it is cash flow you are looking for you may need to look out of the area.

 I still see posts that indicate San Diego does not have good cash flow.  All these posts are from people who have not invested in San Diego RE.  

Cash flow is defined as the cash flow over the hold period.  It is not the initial cash flow or the projected cash flow.  Historically San Diego has produced outstanding cash flow.  This is due to historically outstanding market rent appreciation. 

San Diego SFR average Rents have increased over $600 over the last 5 years (source Zillow). I expect rents for 2019 will increase 8%.

The market with higher rent appreciation will always eventually have better cash flow than a market with lower rent appreciation.  It is in the math.