All Forum Posts by: Adam Tyer

Even though 2 of my San Diego STRs are in mission beach where quota was hit and many STRs had to convert to not STR (MTR, LTR, sell, etc), my ADR is down compared to past results. This off season, mission beach was the most dead since the Great Recession (excluding COVID lockdown periods). My other San Diego STRs also have lower ADR than historical expectations.

So I looked up our occupancy compared to market occupancy where our STRs are located.  We were way above average occupancy on one, and slightly above average on the others.  These occupancy rates local to my STRs is down significantly from years before the quota (esp compared to 2019 and 2022)

In addition, only mission beach has hit its quota. The rest of San Diego still has STR permits available.

I am hoping for a good peak season to offset how poor the off season was.

You are doing something very well if your ADR is up (or you previously was doing something terribly wrong). 

Good luck.

 Indeed, I beleive the reduction in competition was the main factor in driving up my ADR. Dan's point is very interesting though. I am near downtown. Prior to the permits, I believe there was oversaturation there... seems like every out property was an airbnb.

@Adam Tyer

Every market is different and unique when it comes to ADR and regulations. I am also in San Diego. There are regulations in place, but it eliminates a lot of competition if you have the right property. Since the licenses came into effect last year, my ADR has jumped significantly. That being said, the biggest hurdle right now is finding good properties with favorable financing. 

IMO the bigger challenge is Quality Control at scale when it comes to cleaners. It's tough to instill that level of work ethic and enforce it consistently. Plus, once you get the cleaners to that level they will realize that they can simply start their own companies and take home more money. Similar to plumbers and other trades i would imagine. 

The cost is at least a big part of it. It's a tough job to do and there are only so many people willing to do that type of job. So, cost and the type of work both play into finding reliable cleaners.

 I live inland north county so my investments are north of I8 (many are in Escondido) but I do not necessarily expect them to outperform the area.  

The 2 areas I believe are most likely to outperform the general San Diego market are 

1) west Chula Vista.  Can you name any other city where by the ocean/bay is cheaper than more inland?  The bay front development is a virtual certainty to lift area. I almost consider this a cannot miss for out performing the general local market.
2) Imperial Beach.  It is the cheapest ocean properties in this country for hundreds of miles.   The Mexican sewage problem constantly is getting more attention.   It likely has never been closer to having funding that can significantly improve the situation, but it is still a ways from being a reality (but once the problem is resolved, the discount due to the issue will quickly vanish). 

Good luck

 >I live in San Diego and it's practically impossible to get a good ROI.

This statement is very incorrect.  Case Shiller shows San Diego to be #3 in nation for total return since 2000.  Neighborhoodscout shows San Diego to be 10/10 in appreciation this century.  I challenge you to find and post a single reputable reference that does not show San Diego to have historically produced outstanding returns for a modest length hold.  

Some easily verified facts:

- San Diego appreciation has been great 

- San Diego rent growth has been great

- prop 13 protects against exorbitant property tax increases

- San Diego has one of the lowest eviction rates in the country

- San Diego has one of the lowest delinquent rent rates in the country

- San Diego has a very low vacancy rate

- historically for long holds, San Diego has produced near top in nation return.  

I challenge you to find a legitimate source that any of the above statements are not accurate. I will word your statement to be historically more accurate: it has been historically difficult to not get a good ROI.

best wishes