I’ve always loved San Diego. Great weather, a vibrant culture, fantastic restaurants—who could ask for more?
Yet, when a friend gave me the opportunity to purchase his condo there, I hesitated.
“But, Dave,” I objected. “I’m not planning on living here forever.” “Well, it can be your first investment property,” he said, dangling the keys in front of me.
He was right. I bought the condo, and when I moved a few years later, it became my first rental. By then, I had learned even more about the real estate market—and the best area to invest in San Diego.
Why Should You Invest in San Diego Real Estate?
San Diego is a huge city. It has a population of over 1.4 million people and it’s growing every day. The job market is strong and diverse—and while the cost of living is high, so are the incomes.
All of these factors make San Diego an excellent place to invest in real estate. But because San Diego is also an extremely large city, you also have your pick of communities and neighborhoods.
What is the Best Area to Invest in San Diego?
Depending on your needs as an investor, you may want to focus on a specific area. Let’s take a look at some of the top areas to invest in, their unique advantages, and their challenges.
- 1. Downtown San Diego
Downtown San Diego is the financial and cultural hub of the city, making it a great place to invest in both commercial and residential properties. A lot of people want to live and work there, but that also makes the competition fierce and the prices high.
- 2. La Jolla
La Jolla is an affluent neighborhood with a strong economy and beautiful beaches. It’s ideal for those who are looking to invest in luxury properties; it’s less ideal for those who are looking for rentals. It can be difficult to find good deals here due to high demand, but the properties there are extremely desirable.
- 3. Carmel Valley
Carmel Valley is an up-and-coming neighborhood with a lot of potential. A suburban, planned community filled with businesses and residential developments, it’s a great place to invest. However, because it is still being developed, you will need to do your research before making an investment.
- 4. East County
East County is a great place to invest in affordable properties. East County is less developed than other parts of the city, which means there’s both more risk and more potential rewards. But it’s also a very large section of San Diego and includes a lot of diversity. Consider investing in a short-term rental in a quaint gold rush town, or a long-term rental in a developing city.
- 5. South Bay
South Bay is home to some of San Diego’s best beaches. It’s a great place to invest in vacation properties. However, the area can be expensive and there is always the risk of hurricanes and flooding. Stock up on insurance for any long-term holdings.
No matter which area you choose to invest in, San Diego has a great real estate market—and a lot of benefits. If you’re thinking of investing in San Diego real estate, do your research and choose the area that makes the most sense to you.
How Do You Start Investing in San Diego?
First, you’ll need to decide how you want to invest. Do you want to fix and flip properties? Do you want to buy a long-term rental? Or maybe you want to wholesale houses? Each of these investment strategies has its own pros and cons.
Next, you’ll need to find leads. Fortunately, there are many methods that a new real estate investor can use to secure leads, including:
- The MLS. You can search for properties on the MLS that fit your investment criteria, but this usually isn’t advisable. Once a property hits the MLS, you’re already in competition with other buyers, whether they’re resident owners or investors.
- Cold calling and direct mailing. Reach out to homeowners directly and let them know that you’re interested in buying their property. Generally, this starts with purchasing a mailing list or a list of phone numbers. Unfortunately, the person on the other end of your message isn’t always happy to receive it. Many real estate investors buy lists, which means homeowners are often inundated with letters and calls.
- Going door-to-door. You can also try knocking on homeowners’ doors and letting them know that you’re looking to buy. It may be that they are looking to sell. While this can be an effective method of getting your name out, it’s also quite invasive and time-consuming.
- Online classifieds. You can search online classifieds websites like Craigslist and Zillow to find properties that are being sold by owners. You may find listings that aren’t represented by an agent, but because the properties are listed online, the competition could very well still be there.
- Foreclosures or pre-foreclosures. You can find properties that are in foreclosure and try to purchase them at a discount. However, keep in mind that people in foreclosure may be dealing with difficult times. They may not be prepared to sell, or they might even be offended that you’re asking.
- Networking. Get to know people within the local market—it’s worth it. The more people you know, the more likely you are to hear about off-market deals. It will take some time—potentially years—to build your network, but once you do, the leads will start coming to you.
And once you’ve found a lead, it’s time to start negotiating. Figure out how much it’ll cost you to repair and update the property and estimate how much you can sell it for.
The most challenging part of this process is developing leads. Lead generation is difficult in a hot market like San Diego. That’s where HomeVestors® comes in.
Get Leads Delivered to You by HomeVestors
HomeVestors®’ nationally recognized “We Buy Ugly Houses®” marketing campaigns can bring leads directly to you. When you sign up for an independently owned and operated HomeVestors® franchise, you receive direct-to-owner leads.
Property owners already interested in selling their San Diego real estate will contact you, not the other way around. And because you spend less time on lead generation, you can spend more time focusing on other tasks and building your business.
If you want to learn more about your franchise options or the best area to invest in San Diego, connect with HomeVestors® today.
Each franchise office is independently owned and operated.