San Diego’s rental property market is strong, and it’s also competitive for tenants who are seeking a well-maintained rental home in an ideal location. There’s a high demand for good housing, and that’s allowing your rental values to flourish and your occupancy rates to remain pretty stable in San Diego.
Even as a well-informed and successful rental property owner, it can be challenging to keep up with the latest trends and regulations. We’re discussing the latest trends in San Diego’s rental market and what property owners need to know to stay ahead of a moving market.
Rising Demand and Rental Rates in San Diego
As California’s second most populous city, San Diego has always easily attracted both visitors and permanent residents. There’s a strong economy driven by several growing industries, a lot of schools and universities, and several military bases. Attracting residents has never really been a problem for rental property owners in this market, and the trend now is that the market is getting even more competitive for renters looking for homes. You should see several applications coming in for each home you have available.
With increased demand and fewer rental properties available in the market, you’ve likely found that you can charge higher rents. That’s great news, but those higher rental values are also leaving a lot of residents feeling like they can’t afford the rents right now. It’s leading to more creative living solutions. You might find more of your tenants are looking for roommates. Plenty of renters in the market are also looking for communal living situations where their rents are more affordable and the spaces they’re living in more responsive to situations where several people are renting space under one roof.
Rental Homes and Technology
Let’s talk about tenant demand and what the renters in San Diego’s market are looking for today.
Technology is especially important.
This is a priority for tenants who are looking for their next rental home. Remember that the work-from-home trend is something that’s taken hold. You have a lot of remote workers renting homes, and they’re going to need the type of technology that helps them keep up with their work.
It’s also about convenience.
A growing population of people are using digital assistants for everything from turning on the lights to asking for directions. Siri and Alexa can accept online grocery orders. People can ask Google to look something up with a voice command; not even touching or tapping their phones.
Smart home technology is more important than ever. Tenants want the ease and convenience of integrated home systems, appliances, and security features. This is a trend that’s rapidly growing in the San Diego rental market, and we expect that investors and rental property owners will adopt more smart home technology over the next decade. Some of the most popular smart home tech for rental homes right now include:
- Video doorbells
- Security systems
- Smart thermostats
- Digital keys
- Ev Charging Capability
Tenants can set timers for their lights, appliances, and thermostats. They can enjoy tech-driven vacuum cleaners and coffee makers. Attracting high-quality residents in the future will require at least a minimal investment in smart home technology.
These technologies offer a variety of advantages, from cost-savings to increased tenant retention and higher rental values. As residents and owners get more comfortable with the existing technologies that are already implemented and effective, the future is likely to include additional innovations that will easily increase tenant satisfaction and ease some of the frustrations in rental property ownership.
San Diego Rental Homes and Sustainability Trends
Another trend we’re seeing in the market is the demand for sustainable housing and greener property functions.
Climate change and environmental responsibility is on the minds of a lot of residents, especially in San Diego, where we have experienced droughts and flooding over the last several years and seen wildfires burn through the state. Property owners can make their rental homes more attractive and raise the rents when they provide these types of upgrades and amenities.
Whether it’s installing electric vehicle charging stations, solar panels, or even switching out your light bulbs, making your rental property in San Diego a little bit greener will be an investment that meets the needs of current rental market trends and provides a boost in your property value.
Some of the most popular sustainable upgrades in the market currently include:
- LED light bulbs.
- Low-flow fixtures like toilets, shower heads, and irrigation systems.
- Double-pane, energy efficient windows.
- Appliances with an Energy Star rating.
- Sustainable flooring materials such as cork, bamboo, and concrete.
Eco-friendly initiatives are going to help your property stand out, and it will deliver higher rents for you.
New Laws to Know
Legal trends are always going to be a big part of what rental property owners have to understand in order to stay up to date on what’s required in the rental market. There’s an especially important one that goes into effect on July 1, 2024.
Previously, you could charge up to twice the amount of one month’s rent in a security deposit for an unfurnished rental property. If you were providing a furnished rental property, your security deposit limit jumped to three times the monthly rent.
Not anymore.
AB 12 was signed by the governor last year, and that law restricts your security deposit amount to the equivalent of one month’s rent. This is for every rental property – furnished or unfurnished. If you’re renting out a home for $3,500, that means the security deposit cannot exceed $3,500.
There’s also a law now in place making it more difficult for landlords to evict tenants in order to make renovations and to ensure that they don’t claim to be taking the property off the market only to rent it out again at a higher rent, thus skirting the rent stabilization laws.
The legal landscaping is always changing in San Diego and throughout California, and you want to make sure you’re aware of any new requirements and your own obligations.
These are some of the latest trends in the San Diego rental market that we think owners like you need to know. We’d be happy to talk further about some of the other shifts that we’re following. Please contact us at San Diego Residential Property Management.